USDINR opened at 82.81 y’day and the pair traded in the 82.73-82.91 range. Spot USDINR closed at 82.81, loss of 8 ps for USD as against prior close of 82.89.

RBI reference rate was fixed at 82.84 on 04/01. Jan USD/INR closed at 82.92, loss of 17 ps for USD as compared to prior day’s close of 83.09. Jan Euro/INR closed at 88.11, GBP/INR at 100.07 and Yen/INR at 63.81. USDINR fwd premia was trading at around 1.95% 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.

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 climbed 92 points (0.51%) y’day. DOW declined 10 points (-0.03%) y’day. Nikkei declined 1.45%  and Hang Seng climbed 3.22% y’day.

Euro is now at 1.0629, Pound at 1.2075, Yen at 131.75.

Commodities: Gold is now at USD 1861 and WT1Crude at USD 73.50/Brent at USD 78.50.

Interest rates: USD 10 Yr yield is at 3.70% and 3 m libor closed at 4.77%. Indian 10 yr benchmark yield closed at 7.32%.

Economic news: Fed members favored a “restrictive policy stance for a sustained period,” until inflation was on a sustained downward path to 2 percent, which was likely to take “some time,” the Fed’s December meeting minutes showed on Wednesday. The minutes stoked fears of higher for longer rates just as data highlighted a slower-than-expected dent in labor demand.  Despite hawkish Fed minutes, US Yields traded down.

US NFP data release on Friday is the next important data release.

Crude declined steeply.

Data highlights: – US ISM (mfrg) is in contraction mode with reading at 48.4.

-EU PMI(services-final) was better than expected at 49.8.

Thursday’s calendar : US Weekly jobless claims and ADP employment data

Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above 50, 200 day major moving averages.20 day moving average is at 82.73. 50 day moving average is at 82.23.200 day moving average is at 79541. 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: 82.93, S1:82.81, S2:82.70, R1:83.04, R2:83.16.             

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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