USDINR opened at 81.74 y’day and the pair traded in the 81.24-81.83 range. Spot USDINR closed at 81.24, loss of 53 ps for USD as against prior close of 81.77.

RBI reference rate was fixed at 81.65 on 18/01. Jan USD/INR closed at 81.32, loss of 50 ps for USD as compared to prior day’s close of 81.82. Jan Euro/INR closed at 88.11, GBP/INR at 100.49 and Yen/INR at 63. USDINR fwd premia was trading at around 2.24% p.a.  FX reserves stands at USD 562 bn as on Jan 6 th.  

In Jan, FII’S have sold Rs 2312 Cr of Equities till date and have sold Rs 1348 Cr of debt till date. In last Calendar Year, FII’S sold close to Rs 1.06 lac Cr worth of Equities.

Benchmark Nifty climbed 112 points (0.62%) y’day. DOW declined 614 points (1.81%) y’day. Nikkei climbed 2.5%  and Hang Seng climbed 0.47% y’day.

Euro is now at 1.0791, Pound at 1.2325, Yen at 128.38.

Commodities: Gold is now at USD 1903 and WT1Crude at USD 79/Brent at USD 84.

Interest rates: USD 10 Yr yield is at 3.37% and 3 m libor closed at 4.81%. Indian 10 yr benchmark yield closed at 7.32%.

Economic news: Rupee gained 50 ps due to bond related inflows. PSU banks sold USD for bond flows.

US retail sales was lower due to declining Gasoline prices, shift to travel spending and heavy retail discounting. Yet high inflation and rising interest rates, along with the threat of recession, have spurred Americans to cut back on spending.

US Wholesale prices sank further due to lower Gasoline prices. The increase in wholesale prices over the past 12 months, meanwhile, slowed to 6.2% from 7.3% in the prior month and a peak of 11.7% last spring. That’s the lowest level in nine months.

Federal Reserve’s beige book, a periodic report on economic conditions throughout its 12 districts, said price growth is expected to moderate though there won’t be much economic growth for the next few months.

Data highlights: – US Core PPI climbed 0.1% m/m, PPI declined -0.5% m/m ,retail sales declined -1.1% m/m and industrial production declined -0.7% m/m.

-EU CPI climbed 9.2% y/y.

-UK CPI climbed 10.5% y/y,and RPI climbed 13.4% y/y

Thursday’s calendar : – US Weekly jobless claims, building permits and housing starts

 Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed below 20 ,50,100 day averages, but still above 200 day major moving averages.20 day moving average is at 82.32. 50 day moving average is at 82.11.200 day moving average is at 79.85. Daily MACD is in sell zone. Important support is at 81.05/80.90 and important resistance is at 81.93. Spot closed below its average level of the day.

Intraday supports and resistances for Jan contract are:

PP: 81.49, S1:81.11, S2:80.90, R1:81.70, R2:82.08.             

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 82.10+.

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 1.0480/1.0420. Daily MACD is in sell zone, implying an important top at 1.0740. 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 1.1840. Important resistance is at 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 129.50/126.50. Major resistance is at 134.50/138.50.

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