USDINR opened at 81.59 y’day and the pair traded in the 81.57-82.07 range. Spot USDINR closed at 81.93, gain of 43 ps for USD as against prior close of 81.50.
RBI reference rate was fixed at 81.74 on 31/01. Feb USD/INR closed at 82.02, gain of 40 ps for USD as compared to prior day’s close of 81.62. Feb Euro/INR closed at 88.88, GBP/INR at 100.96 and Yen/INR at 63.14. USDINR fwd premia was trading at around 2.35% p.a. FX reserves stands at USD 573.75 bn as on Jan 20 th.
|PAIRS||RBI REF RATE (31/01)|
In Jan, FII’S have sold Rs 13423 Cr of Equities till date and have bought Rs 2555 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 13 points (0.07%) y’day. DOW climbed 368 points (1.09%) y’day. Nikkei declined 0.39% and Hang Seng declined 1.03% y’day.
Euro is now at 1.0862, Pound at 1.2311, Yen at 129.94.
Commodities: Gold is now at USD 1943 and WT1Crude at USD 79/Brent at USD 85.75.
Interest rates: USD 10 Yr yield is at 3.51% and 3 m libor closed at 4.81%. Indian 10 yr benchmark yield closed at 7.37%.
Economic news: Rupee declined 43 ps on month end demand by Oil companies. IMF expects Indian GDP to grow by 6.8% in this fiscal, but slow down to 6.1% in next fiscal. India and China are expected to contribute to 50% of Global GDP growth.
Indian economic survey expects GDP to climb between 6 and 6.8% in 23-24 fiscal. Indian economy is robust and is expected to be supported by domestic demand and investment. Borrowing cost is expected to remain high and entrenched inflation is also expected to maintain rates high. Credit growth to small and MSME sector was above average at 30.5% and Govt capital expenditure increased by 63.4% and contributed to growth. High commodity prices has contributed to high Current account deficit. Rupee can come under pressure, if CAD surges. Gross tax revenue climbed 15.5%, due to buoyancy in direct taxes and GST. Banks have better and cleaner balance sheets. Food grains production hit 315.7 mn tonnes. Institutional credit to agri sector is 18.6 lac Cr. Services sector is expected to grow by 8.4% in 23-24. India is the largest recipient of remittances totaling USD 100 bn last year.
Fed, ECB and BOE meetings along with ISM, PMI surveys and US employment data are key events for the coming week.
Data highlights: – US House price index declined -0.1% m/m, consumer confidence declined to 107.1.
-German retail sales declined -5.3% m/m.
Wednesday’s calendar : – US ADP employment report, ISM(mfrg) and construction spending
-EU PMI(mfrg), CPI and unemployment rate
Daily Support/Resistance table
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
Technicals: Spot closed below 50 day average, but still above 20, 100 and 200 day major moving averages.20 day moving average is at 81.78. 50 day moving average is at 82.08.200 day moving average is at 80.02. Daily MACD is in buy zone. Important support is at 81.78/81.42 and important resistance is at 82.10/82.45. Spot closed above its average level of the day.
Intraday supports and resistances for Feb contract are:
PP: 81.96, S1:81.73, S2:81.44, R1:82.25, R2:82.48.
Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.
However on directional basis, suggest the following:
Exports be hedged.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is above 50 and 200 day major moving averages. Major resistance is at 1.0945/1.1045. Next major support is at 1.0740/1.0625. Daily MACD is in buy zone, implying an important bottom at 1.0480. 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 buy zone, implying important bottom at 1.1840 and weekly MACD is in buy zone, implying important bottom at 1.0380. Important support is at 1.2260/1.2160. 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 buy zone, implying important bottom at 127.25. Important resistance is at 131.50. Major resistance is at 131.60/134.
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