USDINR opened at 82.55 on Tuesday and the pair traded in the 82.53-82.70 range. Spot USDINR closed at 82.66, gain of 3 ps for USD as against prior close of 82.63.

RBI reference rate was fixed at 82.68 on 21/03. Mar USD/INR closed at 82.67, gain of 5 ps for USD as compared to prior day’s close of 82.62. Mar Euro/INR closed at 89.04, GBP/INR at 101.17 and Yen/INR at 62.57. USDINR fwd premia was trading at around 2.30% p.a.  FX reserves declined by USD 2.39 bn to USD 560 bn as on March 10 th.

In March, FII’S  have bought Rs 16137 Cr of Equities and have sold Rs 2531 Cr of debt . In last Calendar Year, FII’S sold close to Rs 1.06 lac Cr worth of Equities.

Benchmark Nifty climbed 44 points (0.26%) y’day. DOW declined 530 points (1.63%) y’day. Nikkei declined 1.93% and Hang Seng  climbed 1.73% y’day.

Euro is now at 1.0890, Pound at 1.2298, Yen at 130.87.

Commodities: Gold is now at USD 1974 and WT1Crude at USD 70/Brent at USD 76.

Interest rates: USD 10 Yr yield is at 3.47% and 3 m libor closed at 4.99%. Indian 10 yr benchmark yield closed at 7.35%.

Economic news: Fed raised rates by 25 bps to a zone of 4.75% to 5% and indicated one more rate hike and dismissed chances of rate cut later this year. Fed said, however, that it “anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.” “The U.S. banking system is sound and resilient. Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation,” the Fed said in a statement.

Growth was upgraded to 0.5% from 0.4% for 2023.

Euro climbed steeply to 1.0890 after Fed move. This is due to strong belief that Fed may not have much room to raise rates from here, despite their inflation fighting stance. Major central banks may adopt different approaches to financial stability and inflation management and not necessarily rely on interest rates.

Data highlights: – US existing home sales climbed to 4.58 mn.

-EU and German Zew survey declined to 10 and 13 respectively,

-UK CPI climbed 10.4% y/y, PPI(output) declined -0.3% m/m, RPI climbed 13.8% y/y.

Thursday’s calendar : – US Weekly jobless claims, new home sales

-EU Consumer confidence

Daily Support/Resistance table

 MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above 20, 50 and 100 day major moving averages.20 day moving average is at 82.47. 50 day moving average is at 82.21.200 day moving average is at 81. Daily MACD is in buy zone. Important support is at 82.43/82.30/82.16 and important resistance is at 82.82/82.95. Spot closed at the average level of the day.

Intraday supports and resistances for March contract are:

PP: 82.65, S1:82.57, S2:82.48, R1:82.74, R2:82.82.             

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

However on directional basis, suggest the following:

USD Exports be hedged. Between 82.70-82.85 levels.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is above 100 and 200 day major moving averages, but below 50 moving average. Major resistance is at 1.0750. Next major support is at 1.0515. Daily MACD is in buy zone, implying an important bottom at 1.0515. Weekly MACD is in sell zone, implying important top at 1.1035.

GBP/USD: The pair is above 50,100 and 200 day moving 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 1.2205/1.2450.

USD/YEN: The pair is below major moving averages. Daily MACD is in sell zone, implying important top at 137.90. Important resistance is at 137.90 and support is at 129.80/127.20.

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