USDINR opened at 81.75 on Monday and the pair traded in the 81.62-81.96 range. Spot USDINR closed at 81.92, loss of 5 ps for USD as against prior close of 81.97. FX market was closed y’day.

RBI reference rate was fixed at 81.74 on 06/03. Mar USD/INR closed at 82.04, loss of 1 ps for USD as compared to prior day’s close of 82.05. Mar Euro/INR closed at 87.30, GBP/INR at 98.60 and Yen/INR at 60.56. 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 117 points (0.67%) on Monday. DOW declined 574 points (1.72%) y’day . Nikkei climbed 0.25% and Hang Seng  declined 0.33% y’day.

Euro is now at 1.0544, Pound at 1.1827, Yen at 137.38.

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 3.99% and 3 m libor closed at 4.95%. Indian 10 yr benchmark yield closed at 7.42%.

Economic news: Hawkish remarks from Federal Reserve chair Jerome Powell ramped up bets on the Fed returning to an aggressive rate-hike path at its meeting later this month. Fed Chairman said the “ultimate level of interest rates is likely to be higher than previously anticipated,” after the “latest economic data have come in stronger than expected.”

The Fed chairman also said that “if the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.” US 2 Year yield jumped to 5%. Equities slumped and USD fell against majors.

Rupee reversed after touching 81.62, There were reports that RBI bought USD. SBI, HDFC bond inflows are expected. Adani related inflows to the extent of USD 1.5 bn triggered recent Rupee gains.

Data highlights: – US factory orders declined -1.6% m/m.

-EU sentix investor confidence survey declined to -11.1. German factory orders climbed 1% m/m.

-UK PMI(construction) rose to 54.6.

Wednesday’s calendar : – US ADP employment report

-German retail sales

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 82.28.200 day moving average is at 80.76. Daily MACD is in sell zone. Important support is at 81.62/81.46 and important resistance is at 82.30. Spot closed above the average level of the day.

Intraday supports and resistances for March contract are:

PP: 81.94, S1:81.81, S2:81.58, R1:82.17, R2:82.30.             

Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.

However on directional basis, suggest the following:

USD Imports 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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