USDINR opened at 82.26 on Friday and the pair traded in the 81.92-82.35 range. Spot USDINR closed at 81.97, loss of 62 ps for USD as against prior close of 82.59.

RBI reference rate was fixed at 82.26 on 03/03. Mar USD/INR closed at 82.05, loss of 66 ps for USD as compared to prior day’s close of 82.71. Mar Euro/INR closed at 87.21, GBP/INR at 98.51 and Yen/INR at 60.52. 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 March, FII’S  have bought Rs 13581 Cr of Equities and have bought Rs 398 Cr of debt . In last Calendar Year, FII’S sold close to Rs 1.06 lac Cr worth of Equities.

Benchmark Nifty climbed 272 points (1.57%) on Friday. DOW climbed 387 points (1.17%) y’day . Nikkei climbed 1.56% and Hang Seng  climbed 0.68% on Friday.

Euro closed the week at 1.0636, Pound at 1.2046, Yen at 135.88.

Commodities: Gold is now at USD 1862 and WT1Crude at USD 79.85/Brent at USD 86.

Interest rates: USD 10 Yr yield is at 3.95% and 3 m libor closed at 4.95%. Indian 10 yr benchmark yield closed at 7.42%.

Economic news: In the last few sessions, Rupee has gained closer to 1 Rupee due to expected inflows related to Adani group. Gains in EM Currencies also had a bearing on Rupee’s gain in the last few days. USDINR’s supports are at 81.68/81.46.  200 day average is at 80.75. Expect Rupee to trade in the 81-83 range in coming weeks. Since Rupee’s gain is more due to one single bulk inflows, sustained gains against the back drop of hawkish Fed may not materialise. RBI may also buy USD closer to 81.25 levels.

Risk on sentiment prevailed, despite expectation of higher US interest rates. Stocks climbed higher on Friday. USD declined modestly against majors. Expansion in service sector could help US and EU to avoid recession. Inflation is expected to ease slowly. In Eurozone, after stronger than expected CPI, most analysts raised their expectation on the terminal rate for ECB to 4%. A rate cut this year is also basically ruled out. Yet, investors reacted more to positive data like PMIs, which painted an upbeat picture as lead by expansion in services.

US Treasury yields rose to the higher level since 2007. 2 Year yield hit 4.96% and 10 Year yield hit 4.09%, before closing at 3.95%. Though US Yield is rising, German Yields are also rising. This should support Euro against USD.

Data highlights: – US ISM(services) climbed to 55.1.

-EU PMI(services) dipped marginally to 52.7, PPI declined -2.8% m/m.

-UK PMI(services) climbed to 53.5.

Monday’s calendar : – US factory orders

-EU sentix investor confidence survey

-UK PMI(construction)

 Daily Support/Resistance table

 MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed below 20, 50 and 100 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 80.76. Daily MACD is in sell zone. Important support is at 81.68/81.46 and important resistance is at 82.34. Spot closed below the average level of the day.

Intraday supports and resistances for March contract are:

PP: 82.22, S1:81.85, S2:81.65, R1:82.42, 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 1.0535. 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 buy zone, implying important bottom at 1.1920 and weekly MACD is in sell zone, implying important top at 1.2450. Important support is at 1.1920. Important resistance is at 1.2145/1.2270/1.2450.

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 134 and 132.

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