FX – MORNING UPDATE :

USDINR opened  at 81.75 y’day and the pair traded in the 81.75-82.21 range. Spot USDINR closed at 82.13, gain of 8 ps for USD as against prior close of 82.05.

RBI reference rate was fixed at 81.91 on 13/03. Mar USD/INR closed at 82.12, gain of 4 ps for USD as compared to prior day’s close of 82.08. Mar Euro/INR closed at 87.73, GBP/INR at 99.17 and Yen/INR at 61.79. USDINR fwd premia was trading at around 2.29% p.a.  FX reserves stands at USD 562.4 bn as on March 3 rd.

PAIRSRBI REF RATE (13/03)
USDINR81.91
EURINR87.83
GBPINR99.22
JPYINR60.94

In March, FII’S  have bought Rs 18635 Cr of Equities and have sold Rs 1798 Cr of debt . In last Calendar Year, FII’S sold close to Rs 1.06 lac Cr worth of Equities.

Benchmark Nifty declined 258 points (1.48%) y’day. DOW declined 90 points (0.28%) y’day. Nikkei declined 1.11% and Hang Seng  climbed 1.95% y’day.

Euro is now at 1.0719, Pound at 1.2166, Yen at 133.29.

Commodities: Gold is now at USD 1918 and WT1Crude at USD 74.50/Brent at USD 80.50.

Interest rates: USD 10 Yr yield is at 3.54% and 3 m libor closed at 5.13%. Indian 10 yr benchmark yield closed at 7.42%.

Economic news: CPI inflation eased moderately to 6.55% in Feb. In Jan. it was at 6.52%. Data is still above RBI’S comfort level of 2-6%. Food inflation remained high at 5.95%. RBI has raised repo rates by 250 bps since last May.

Equity markets are rattled by fall out of SVB bank failure, US Fed and FDIC tried to calm depositors by announcing full protection. But it had limited impact on other banks as most of them fell 60% in value. Additionally, the market is also showing signs of pricing out a rate hike by the Fed on March 22, with Goldman Sachs predicting no change. Fed fund futures indicate only an 80% chance of a 25bps hike, though the situation remains fluid. Treasury yields plummeted, with the 2-year Treasury falling more than 60 basis points slipping below 4% to six-week lows.

Data highlights: – No major data release.

Tuesday’s calendar : – US CPI

-UK unemployment rate and claimant count change.

USD/INR   82.2181.75
EUR/USD       1.07191.07491.0652
GBP/USD       1.21661.22001.2049
USD/JPY       133.29134.96132.29

Daily Support/Resistance table

Currency PairsPivotR1R2R3S1S2S3
EURO/USD1.07081.07641.08051.08611.06671.06111.0570
GBP/USD1.21391.22291.22901.23801.20781.19881.1927
USD/JPY133.45134.61136.12137.27131.94130.78129.27
USD/INR82.0382.3182.49 81.8581.57 

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency PairSupportsResistancesTrendRemarks
EURO/USD1.05351.07SIDEUP>1.07
GBP/USD1.1920/1.181.2110SIDEUP>1.2110
USD/JPY132.20137.90SIDEDN<132.20
USD/INR81.75/81.6282.30SIDEUP>82.30
USD/CHF0.90600.9440DNUP>0.9440

Technicals: Spot closed below 20, 50 and 100 day major moving averages.20 day moving average is at 82.52. 50 day moving average is at 82.21.200 day moving average is at 80.76. Daily MACD is in sell zone. Important support is at 81.75/81.62 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: 82.11, S1:81.93, S2:81.64, R1:82.41, R2:82.58.             

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 1.07. Next major support is at 1.0535. Daily MACD is in buy zone, implying an important bottom at 1.0535. 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 1.1803 and weekly MACD is in sell zone, implying important top at 1.2450. Important support is at 1.1920/1.1803. Important resistance is at 1.2110/1.2270/1.2450.

USD/YEN: The pair is below 100 and 200 day moving averages, but above 50 day average. Daily MACD is in sell zone, implying important top at 137.90. Important resistance is at 137.90 and support is at 132.20.

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