FX MORNING UPDATE

USDINR opened at 82.78 on Friday and the pair traded in the 82.69-82.81 range. Spot USDINR closed at 82.73, loss of 8 ps for USD as against prior close of 82.81. Rupee declined 1.67% in Dec. Rupee declined from 81.42(Nov close) to 82.73 in Dec. Rupee has declined 11.28% y/y. Rupee has declined from 74.34 (Dec 21 close) to 82.73.

RBI reference rate was fixed at 82.78 on 30/12Jan USD/INR closed at 82.85, loss of 11 ps for USD as compared to prior day’s close of 82.96. Jan Euro/INR closed at 88.62, GBP/INR at 99.76 and Yen/INR at 63.12. USDINR fwd premia was trading at around 2.12% p.a.  FX reserves stands at USD 562 bn as on Dec 30 th.  FX reserves has declined 72 bn y/y and around 44.5 bn from March 2022.

PAIRSRBI REF RATE (28/12)
USDINR82.78
EURINR88.15
GBPINR99.74
JPYINR62.45

In Dec, FII’S have bought Rs 2206 Cr of Equities till date and have sold Rs 3228 Cr of debt till date. In this Calendar Year, FII’S have sold close to Rs 1.06 lac Cr worth of Equities.

Benchmark Nifty declined 85 points (0.47%) on Friday. DOW declined 75 points (0.22%) on Friday. Nikkei closed flat  and Hang Seng climbed 0.20% on Friday.

Euro closed the week at 1.0707, Pound at 1.2099, Yen at 131..13

Commodities: Gold is now at USD 1830 and WT1Crude at USD 80.45/Brent at USD 86.

Interest rates: USD 10 Yr yield is at 3.88% and 3 m libor closed at 4.77%. Indian 10 yr benchmark yield closed at 7.32%.

Economic news: India’s Q2 Current account deficit widened to 4.4% of GDP, from 2.2% in Q1. CAD is at USD 36.4 bn, up from USD 18.2 bn in Q1. CAD was at USD 9.7 bn (1.3% in Q1 21-22).Trade deficit expanded to US 83.5 bn in Q2 as against USD 63 bn in Q1.

Indian benchmark index Nifty gained 4.3% y/y. This is against a fall of 19.2% in US index S&P 500. EM index declined 22% and MSCI Asia index declined 19.6% in 2022.

US FOMC meeting minutes, PMI data from EU, US ISM and employment data are key events to watch in coming week.

Data highlights: – No major data release.

Monday’s calendar : No major data release.

USD/INR   82.8182.69
EUR/USD       1.07041.07131.0639
GBP/USD       1.20991.21071.2011
USD/JPY       131.13133.10130.79

Daily Support/Resistance table

Currency PairsPivotR1R2R3S1S2S3
EURO/USD1.06851.07311.0759 1.06571.0611 
GBP/USD1.20721.21331.2168 1.20371.1976 
USD/JPY131.67132.55133.98 130.24129.36 
USD/INR82.7482.8082.86 82.6782.62 

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency PairSupportsResistancesTrendRemarks
EURO/USD1.05901.08/1.0945UPSIDE<1.0590
GBP/USD1.1750/1.16501.2345/1.2445UPDN<1.1650
USD/JPY130.50/129.50/126.50134.50DNSIDE>134.50
USD/INR82.58/82.40/82.1082.92/83.30UPSIDE<82.58
USD/CHF0.910.9450DNSIDE>0.9450

Technicals: Spot closed above 50, 200 day major moving averages.20 day moving average is at 82.69. 50 day moving average is at 82.23.200 day moving average is at 79.31. Daily MACD is in sell zone. Important support is at 82.58/82.40 and important resistance is at 82.92. Spot closed below its average level of the day.

Intraday supports and resistances for Jan contract are:

PP: 82.87, S1:82.79, S2:82.74, R1:82.92, R2:83.             

Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.

However on directional basis, suggest the following:

Exports be hedged on rally to 82.90+.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is above 50 and 200 day major moving averages. Major resistance is at 1.0735/1.08/1.0945. Next major support is at 1.0575. Daily MACD is in buy zone, implying an important bottom at 1.0575. Weekly MACD is in buy zone, implying important bottom at 0.9535.

GBP/USD: The pair is above 50 and 200 day moving averages. Daily MACD is in sell zone, implying important top at 1.2445 and weekly MACD is in buy zone, implying important bottom at 1.0380. Important support is at 1.1750/1.1650. Important resistance is at 1.2350/1.2450/1.2750.

USD/YEN: The pair is below 20, 50 and 100 day moving averages. Daily MACD is in sell zone, implying important top at 134.50. Important support is at 130.50/129.50/126.50. Major resistance is at 134.50/138.50.

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