USDINR opened at 82.67 on Friday and the pair traded in the 82.66-82.81 range. Spot USDINR closed at 82.75, gain of 1 ps for USD as against prior close of 82.74. Rupee gained, despite broad USD’S strength against majors.

RBI reference rate was fixed at 82.74 on 24/02. Mar USD/INR closed at 82.88, gain of 1 ps for USD as compared to prior day’s close of 82.87. Feb Euro/INR closed at 87.86, GBP/INR at 99.41 and Yen/INR at 61.59. USDINR fwd premia was trading at around 2.11% p.a.  FX reserves stands at USD 561.26 bn as on Feb 17 th. This is the third consecutive week of a drop in the reserves after the $8.319 billion decrease in the previous reporting week to $566.948 billion.

In Feb, FII’S  have bought Rs 2345 Cr of Equities and have bought Rs 1150 Cr of debt . In last Calendar Year, FII’S sold close to Rs 1.06 lac Cr worth of Equities.

Benchmark Nifty declined 45 points (0.26%) on Friday. DOW declined 336 points (1.02%) on Friday . Nikkei is up 1.29% and Hang Seng is down 1.68% on Friday.

Euro is now at 1.0547, Pound at 1.1940, Yen at 136.49.

Commodities: Gold is now at USD 1818 and WT1Crude at USD 76.45/Brent at USD 83.25.

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 7.42%.

Economic news: USD ended higher against majors as markets priced in higher terminal rates than anticipated earlier, due to strong economic data. Markets are pricing in nearly 40% chance of one more hike in July to 5.50-5.75%, i.e. a higher terminal rate, comparing to just 20% a week ago and 0% a month ago. Core PCE inflation accelerated, dashing hopes of end to rate hikes. US NFP, ISM data are two important data events in the coming week.

PMI data from Eurozone and the UK indicated that service sectors picked up much momentum in February, and are leading the economies out of recession risk. ECB is set to raise rates by 50 bps in March.

US 10-year yield finally broke through 3.905 near term resistance last week.US stocks ended deeply lower.

Data highlights: –  US Personal income was flat m/m, spending climbed 2.1% m/m and Core PCE climbed 0.5% m/m, in line with expectation.

-US Pending home sales declined -5.7% m/m.. Durables order climbed 0.7% m/m.

Monday’s calendar : No major data release.

 Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above 20,50, 100 and 200 day major moving averages.20 day moving average is at 82.50. 50 day moving average is at 82.32.200 day moving average is at 80.64. 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: 82.88, S1:82.80, S2:82.72, R1:82.96, R2:83.04.             

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, but below 20 and 50 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 sell zone, implying important top at 1.1035.

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 sell zone, implying important top at 1.2450. Important support is at 1.1920. Important resistance is at 1.2270/1.2450.

USD/YEN: The pair is below 100 and 200 day moving averages, but above 20 and 50 day averages. Daily MACD is in buy zone, implying important bottom at 127.25. Important resistance is at 137 and later at 139.20. Supports are at 135.20 and 132.

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