USDINR opened at 82.78 y’day and the pair traded in the 82.74-82.83 range. Spot USDINR closed at 82.79, gain of 6 ps for USD as against prior close of 82.73.
RBI reference rate was fixed at 82.75 on 21/02. Feb USD/INR closed at 82.81, gain of 8 ps for USD as compared to prior day’s close of 82.73. Feb Euro/INR closed at 88.28, GBP/INR at 100.24 and Yen/INR at 61.60. USDINR fwd premia was trading at around 2.08% p.a. FX reserves stands at USD 567 bn as on Feb 17 th. Reserves declined 8 bn USD as compared to prior week due to Valuation dip in FCY assets.
| PAIRS | RBI REF RATE (21/02) |
| USDINR | 82.75 |
| EURINR | 88.32 |
| GBPINR | 99.56 |
| JPYINR | 61.58 |
In Feb, FII’S sold Rs 1408 Cr of Equities and have bought Rs 9188 Cr of debt . In last Calendar Year, FII’S sold close to Rs 1.06 lac Cr worth of Equities.
Benchmark Nifty declined 18 points (0.10%) y’day. DOW declined 697 points (2.06%) . Nikkei declined 0.21% and Hang Seng declined 1.71% y’day.
Euro is now at 1.0659, Pound at 1.2130, Yen at 134.71.
Commodities: Gold is now at USD 1845 and WT1Crude at USD 76/Brent at USD 83.
Interest rates: USD 10 Yr yield is at 3.95% and 3 m libor closed at 4.87%. Indian 10 yr benchmark yield closed at 7.38%.
Economic news: EU and UK PMI (composite) were strong and faded worries over recession.
Germany ZEW Economic Sentiment rose from 16.9 to 28.1 in February, above expectation of 22.8. Current Situation index rose from -58.6 to -45.1, above expectation of -50.0.
Eurozone ZEW Economic sentiment rose from 16.7 to 29.7, above expectation of 22.3. Current Situation Index rose 13.2 pts to -41.6.
ZEW President said: “Meanwhile a large fraction of the survey participants expects the economic situation to improve in six months’ time. However, the current situation is still assessed as relatively unfavorable.
Chief Business Economist at S&P Global Market Intelligence said that :“Business activity across the eurozone grew much faster than expected in February, with growth hitting a nine-month high thanks to resurgent service sector activity and a recovering manufacturing economy. February’s PMI is broadly consistent with GDP rising at a quarterly rate of just under 0.3%.“However, although inflationary pressures have continued to moderate in February, the survey hints at persistent elevated price trends in the service sector, linked in part to higher wage growth, which will concern ECB policymakers
FOMC Minutes, G 20 meetings and US spending data are important events for the week.
Data highlights: – US PMI(mfrg) remained in contraction mode at 47.8 and existing home sales dipped to 4 mn.
-EU PMI(mfrg-flash) dipped to 48.5 and PMI(services-flash) climbed to 53.
-EU Zew and German Zew survey climbed to 29.7 and 28.1 respectively.
-UK PMI(mfrg) climbed to 49.2 and PMI(services) climbed to 53.3.
Wednesday’s calendar : – German Ifo survey
| USD/INR | 82.83 | 82.74 | ||
| EUR/USD | 1.0659 | 1.0704 | 1.0671 | |
| GBP/USD | 1.2130 | 1.2057 | 1.2014 | |
| USD/JPY | 134.71 | 134.54 | 133.93 |
Daily Support/Resistance table
| Currency Pairs | Pivot | R1 | R2 | R3 | S1 | S2 | S3 |
| EURO/USD | 1.0662 | 1.0686 | 1.0722 | 1.0746 | 1.0626 | 1.0602 | 1.0566 |
| GBP/USD | 1.2081 | 1.2174 | 1.2240 | 1.2333 | 1.2015 | 1.1922 | 1.1857 |
| USD/JPY | 134.79 | 135.43 | 135.86 | 136.50 | 134.35 | 133.72 | 133.28 |
| 132.73 | 82.78 | 82.83 | 82.88 | 82.73 | 82.68 |
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
| Currency Pair | Supports | Resistances | Trend | Remarks |
| EURO/USD | 1.0480 | 1.08 | SIDE | UP>1.08 |
| GBP/USD | 1.1920 | 1.2270/1.2450 | SIDE | UP>1.2270 |
| USD/JPY | 131.50 | 136.50 | SIDE | DN<131.50 |
| USD/INR | 82.58/82.34 | 82.94 | UP | SIDE<82.58 |
| USD/CHF | 0.9090 | 0.9335/0.9590 | DN | SIDE>0.9335 |
Technicals: Spot closed below 50 day average, but still above 20, 100 and 200 day major moving averages.20 day moving average is at 82.32. 50 day moving average is at 82.32.200 day moving average is at 80.48. Daily MACD is in buy zone. Important supports are at 82.58/82.34 and important resistance is at 82.95. Spot above above the average level of the day.
Intraday supports and resistances for Feb contract are:
PP: 82.80, S1:82.75, S2:82.69, R1:82.86, R2:82.91.
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 100 and 200 day major moving averages. Major resistance is at 1.08. Next major support is at 1.0480. 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 1.1920. Important resistance is at 1.2270.
USD/YEN: The pair is below 100 and 200 day moving averages. Daily MACD is in buy zone, implying important bottom at 127.25. Important resistance is at 132.90. Major support is at 127.25.
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