USDINR opened at 82.57 y’day and the pair traded in the 82.50-82.62 range. Spot USDINR closed at 82.59, gain of 9 ps for USD as against prior close of 82.50.

RBI reference rate was fixed at 82.55 on 02/03. Mar USD/INR closed at 82.71, gain of 10 ps for USD as compared to prior day’s close of 82.61. Mar Euro/INR closed at 87.97, GBP/INR at 99.10 and Yen/INR at 60.78. 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 129 points (0.74%) y’day. DOW climbed 341 points (1.05%) y’day . Nikkei declined 0.06% and Hang Seng  declined 0.92% y’day.

Euro is now at 1.0612, Pound at 1.1975, Yen at 136.62.

Commodities: Gold is now at USD 1846 and WT1Crude at USD 78/Brent at USD 84.50.

Interest rates: USD 10 Yr yield is at 4.06% and 3 m libor closed at 4.95%. Indian 10 yr benchmark yield closed at 7.43%.

Economic news: USD climbed against majors, despite strong EU CPI data and hawkish minutes from ECB.

ECB’s February 1-2 meeting minutes noted, “it was generally felt that concerns of ‘overtightening’ were premature at the present high levels of inflation and in view of the likely persistence of underlying price pressures”.The view was expressed that, “given the still substantial distance to the prospective terminal rate, there continued to be value – from a risk management perspective – in frontloading rate hikes at the present stage.” The communication regarding March meeting, “conveyed the view that, in the absence of abrupt changes in circumstances, a further 50 basis point interest rate hike at the March meeting was consistent with a very wide range of possible scenarios for the way inflation would develop.”

Data highlights: – US Weekly jobless claims dipped to 190k.

-EU CPI climbed 8.5% y/y. Unemployment rate inched higher to 6.7%.

Friday’s calendar : -US ISM(services)

-EU PMI(services), PPI and unemployment rate

-UK PMI(services)

 Daily Support/Resistance table

 MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above 50, 100 and 200 day major moving averages.20 day moving average is at 82.62. 50 day moving average is at 82.32.200 day moving average is at 80.64. Daily MACD is in sell zone. Important support is at 82.34 and important resistance is at 82.95. Spot closed above the average level of the day.

Intraday supports and resistances for March contract are:

PP: 82.67, S1:82.62, S2:82.55, R1:82.75, R2:82.79.             

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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