FX MORNING UPDATE
USDINR opened at 81.70 Y’day and the pair traded in the 81.61-81.85 range. Spot USDINR closed at 81.84, gain of 8 ps for USD as against prior close of 81.76. Rupee weakened after initial gains, due to month end demand. Market was closed y’day.
RBI reference rate was fixed at 81.78 on 28/04. May USD/INR closed at 81.91, gain of 1 ps for USD as compared to prior day’s close of 81.90. May Euro/INR closed at 90.48, GBP/INR at 102.10 and Yen/INR at 61.66. USDINR fwd premia was trading at around 2.30% p.a. FX reserves declined USD 2 bn as compared to prior week and stood at USD 584 bn as on Apr 21 st.
| PAIRS | RBI REF RATE (28/04) |
| USDINR | 81.78 |
| EURINR | 90.08 |
| GBPINR | 102.02 |
| JPYINR | 60.36 |
In April, FII’S have bought Rs 9264 Cr of Equities and have bought Rs 758 Cr of debt . In 2022-23 fiscal year, FII’S have net sold Rs 27593 Cr of Equities and have net bought Rs 838 Cr of debt.
Benchmark Nifty climbed 149 points (0.85%) on Friday. DOW declined 46 points (0.14%) y’day. Nikkei climbed 0.92% and Hang seng climbed 0.27% on Friday.
Euro is now at 1.0993, Pound at 1.2507, Yen at 137.36.
Commodities: Gold is now at USD 1994 and WT1Crude at USD 76/Brent at USD 79.
Interest rates: USD 10 Yr yield is at 3.55% and 3 m libor closed at 5.22%. Indian 10 yr benchmark yield closed at 7.11%.
Economic news: GST collections climbed 12% y/y to Rs 1.87 lac Cr, highest ever since GST was launched. Govt aims to reach Rs 9.56 Lac cr GST collection for this fiscal, which is 12% higher than last year.
Indian PMI(mfrg) climbed to 57.2 as compared to 56.4 in March. New orders and output grew at its fastest since Dec 2022.
Maruti sold 1,37,320 Cars in domestic market, which is 12.6% higher compared to April 2022. Indian aviation sector returned to pre pandemic level with 1.28 Crore passengers travelling in April.
FOMC meeting and ECB meeting outcome are key events for the week. US employment and ISM data are other important data events for the week.
USD rose slightly after US ISM data. US ISM said: “This is the sixth month of contraction and continuation of a downward trend that began in June 2022. The past relationship between the Manufacturing PMI and the overall economy indicates that the April reading (47.1 percent) corresponds to a change of minus-0.6 percent in real gross domestic product (GDP) on an annualized basis.”
Chinese PMI(mfrg) contracted to 49.2 . This is the first contraction in this year.
Data highlights: – US ISM (mfrg) was in contraction mode at 47.1. However, prices paid component remained high at 53.2. Construction spending climbed 0.3% m/m.
Tuesday’s calendar : – US factory orders
-EU PMI(mfrg-final), CPI
-UK PMI(mfrg-final)
| USD/INR | 81.85 | 81.72 | ||
| EUR/USD | 1.0993 | 1.1035 | 1.0964 | |
| GBP/USD | 1.2507 | 1.2569 | 1.2480 | |
| USD/JPY | 137.36 | 137.57 | 136.26 |
Daily Support/Resistance table
| Currency Pairs | Pivot | R1 | R2 | R3 | S1 | S2 | S3 |
| EURO/USD | 1.0989 | 1.1014 | 1.1060 | 1.1085 | 1.0943 | 1.0918 | 1.0872 |
| GBP/USD | 1.2511 | 1.2542 | 1.2599 | 1.2630 | 1.2453 | 1.2423 | 1.2365 |
| USD/JPY | 137.12 | 137.98 | 138.43 | 139.28 | 136.67 | 135.81 | 135.36 |
| USD/INR | 81.80 | 81.89 | 81.93 | 81.75 | 81.67 |
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
| Currency Pair | Supports | Resistances | Trend | Remarks |
| EURO/USD | 1.09 | 1.1075 | UP | SIDE<1.09 |
| GBP/USD | 1.2345/1.2175 | 1.2545 | UP | DN<1.2175 |
| USD/JPY | 132.75/132/130.60 | 135/138 | SIDE | DN<132 |
| USD/INR | 81.62/81.45 | 82.02/82.23 | DN | UP>82.23 |
| USD/CHF | 0.8755 | 0.90/0.9120 | DN | UP>0.9485 |
Technicals: Spot closed below 20, 50,100 day averages but still above 200 day major moving average.20 day moving average is at 82.03. 50 day moving average is at 82.32.200 day moving average is at 81.49. Daily MACD is in sell zone. Important support is at 81.62/81.45 and important resistance is at 82.02/82.24. Spot closed above the average level of the day.
Intraday supports and resistances for May contract are:
PP: 81.90, S1:81.84, S2:81.77, R1:81.96, R2:82.03.
Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.
However on directional basis, suggest the following:
USD Exports be hedged at 82+ levels.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is above 50, 100 and 200 day major moving averages. Major resistance is at 1.1075. Next major support is at 1.09/1.0750. Daily MACD is in buy zone, implying an important bottom at 1.0515. Weekly MACD is in buy zone, implying important bottom at 1.0515.
GBP/USD: The pair is above 50,100 and 200 day moving averages . Daily MACD is in sell zone, implying important top at 1.2545 and weekly MACD is in buy zone, implying important bottom at 1.1803. Important support is at 1.2345/1.2175. Important resistance is at 1.2545.
USD/YEN: The pair is below 200 day moving average. Daily MACD is in buy zone, implying important bottom at 129.65. Important resistance is at 135/138 and support is at 132.75/132/130.60.
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