USDINR opened at 82.15 on Friday and the pair traded in the 81.75-82.31 range. Spot USDINR closed at 81.83, loss of 39 ps for USD as against prior close of 82.22.

RBI reference rate was fixed at 82.23 on 03/02. Feb USD/INR closed at 82.02, loss of 25 ps for USD as compared to prior day’s close of 82.27. Feb Euro/INR closed at 89.69, GBP/INR at 100.51 and Yen/INR at 64.05. USDINR fwd premia was trading at around 2.35% p.a.  FX reserves stands at USD 576.75 bn as on Jan 27 th.  

In Jan, FII’S  sold Rs 10350 Cr of Equities and have bought Rs 2093 Cr of debt . In last Calendar Year, FII’S sold close to Rs 1.06 lac Cr worth of Equities.

Benchmark Nifty climbed 243 points (1.38%) on Friday. DOW declined 127 points (0.38%) on Friday. Nikkei climbed 0.40%  and Hang Seng declined 1.36% on Friday.

Euro closed the week at 1.0793, Pound at 1.2051, Yen at 131.17.

Commodities: Gold is now at USD 1878 and WT1Crude at USD 73.20/Brent at USD 79.80.

Interest rates: USD 10 Yr yield is at 3.52% and 3 m libor closed at 4.81%. Indian 10 yr benchmark yield closed at 7.27%.

Economic news: Indian Equity and FX markets were dominated by news on Adani. SBI and LIC have issued statements, infusing confidence in investors and depositors mind. RBI issued a statement saying that bank lending to the group is as per norms and within permissible limits. FM also reiterated that Indian regulatory mechanism is strong and there is no danger of spill over effect.

Rupee recovered steeply from 82.31 to 81.76 after bank statements.

US added 517,000 new jobs to the economy in January. Expectations was for only for an additional 185,000 jobs to have been added. In addition, December’s print was revised to 260,000 from 223,000 and the Unemployment Rate dropped to 3.4%, the lowest since 1969! . Average hourly earnings moderated to 0.3% m/m.

ECB hiked rates by 50 bps and committed to another 50 bps hike in March. BOE hiked rates by 50 bps, but was cautious in its statement acknowledging that inflation is softening.

ECB said that interest rates would be determined on a meeting-by-meeting basis moving forward.  However, the statement also said that rates still have to rise significantly higher. In her press conference, ECB President noted that “We haven’t reached a peak in rates, we have ground to cover” and “We know we are not done yet.”  Although the ECB sounded the most hawkish of the three major central banks in action, Euro declined.

US tech companies earnings were mixed. While Meta rallied on stock buy back and better results. Google, Amazon and Apple disappointed. However, US tech index and S&P climbed.

Data highlights: – US Weekly jobless claims declined to 183k, factory orders climbed 1.8% m/m.

-US ISM(non mfrg) climbed steeply to 55.2.

-EU PMI(services) was finalized at 50.8.

-UK PMI(services) climbed to 48.7.

Monday’s calendar : – EU sentix investor confidence

-UK PMI(construction)

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 81.70. 50 day moving average is at 82.15.200 day moving average is at 80.16. Daily MACD is in buy zone. Important supports are at 81.76/81.68/81.42 and important resistance is at 82.40. Spot closed below 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 1.0740/1.0675. Daily MACD is in sell zone, implying an important top at 1.1035. Weekly MACD is in buy zone, implying important bottom at 0.9535.

GBP/USD: The pair is above 100 and 200 day moving averages , but below 20 and 50 day averages. Daily MACD is in sell zone, implying important top at 1.2450 and weekly MACD is in buy zone, implying important bottom at 1.0380. Important support is at 1.1940/1.1840. Important resistance is at 1.2450.

USD/YEN: The pair is below 50 and 100 day moving averages. Daily MACD is in buy zone, implying important bottom at 127.25. Important resistance is at 132.50. Major support is at 127.25.

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