FX – MORNING UPDATE :

USDINR opened at 82.90 y’day and the pair traded in the 82.84-82.91 range. Spot USDINR closed at 82.85, loss of 5 ps for USD as against prior close of 82.90.

RBI reference rate was fixed at 82.91 on 06/03. Mar USD/INR closed at 82.87, loss of 7 ps for USD as compared to prior day’s close of 82.94. Mar Euro/INR closed at 90.15, GBP/INR at 105.39 and Yen/INR at 55.57. 1 year USDINR fwd premia was trading at around 1.65% p.a.  FX reserves stood at USD 619 bn, as on Feb 23 rd.

In Feb, FPI’S bought Rs 4000 Cr of Equities and bought Rs 19693 Cr of debt . In last calendar year, FII’S have net bought Rs 172853 Cr of Equities and have net bought Rs 70489 Cr of debt.

Benchmark Nifty climbed 117 points (0.53%) y’day. US S&P climbed 26 points (0.51%) y’day. Nikkei was up 0.06% and Hang Seng climbed 1.70% y’day.

Euro is now at 1.0849, Pound at 1.2696, Yen at 149.99.

Commodities: Gold is now at USD 2145 and WT1Crude at USD 79/Brent at USD 83.

Interest rates: USD 10 Yr yield is at 4.11% and 3 m libor closed at 5.59%. Indian 10 yr benchmark yield closed at 7.05%.

Economic news: USDINR declined below long term averages as FII flows into Equities accelerated. Combined inflows into debt and Equity markets was close to USD 500 mn y’day.

Fed Chair Jerome Powell said that the Central bank will cut interest rates eventually in 2024, but he noted that the Fed still needed more confidence that inflation was decreasing. 

ECB rate decision and US employment data are important events for the week.

Data highlights: – US ADP employment report reported that private sector added 140k jobs.

-UK PMI(construction) climbed to 49.7.

Thursday’s calendar : -US Weekly jobless claims

-German factory orders

Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed below major moving averages.20 day moving average is at 82.94. 50 day moving average is at 83.04.200 day moving average is at 82.82. Daily MACD is in sell zone. Important support is at 82.80 and important resistance is at 82.96/83.12. Spot closed below the average level of the day.

Intraday supports and resistances for March contract are:

PP: 82.88, S1:82.82, S2:82.79, R1:82.92, R2:82.97.             

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

However on directional basis, suggest the following:

USD exports be hedged at 83/83.05. Imports be hedged at 82.80 for 2 months.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is above major moving averages. Major resistance is at 1.0995. Next major support is at 1.07. Daily MACD is in buy zone, implying an important support at 1.07. Weekly MACD is in sell zone, implying important top at 1.1140.

GBP/USD: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 1.25 and weekly MACD is in sell zone, implying important top at 1.2829. Important support is at 1.25. Important resistance is at 1.2830.

USD/YEN: The pair is above all major moving averages. Daily MACD is in sell zone, implying important top at 150.90. Important resistance is at 150.90/152 and support is at 148.80/146.85.

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