USDINR opened at 73.64 on Friday and the pair traded in the 73.42-74.22 range. Spot USDINR closed at 73.76, gain of 19 ps ps for USD as against prior close of 73.57.RBI reference rate was fixed at 73.58. Rupee declined to 74.22 after RBI maintained status quo on rates. Oct USD/INR closed at 73.74, gain of 14 ps for USD as compared to prior day’s close of 73.60. Oct Euro/INR closed at 85.22, GBP/INR at 96.52 and Yen/INR at 65.03.
FII’S sold Rs 5395 Cr of Indian Equities in Oct till date . FII’S sold Rs 1591 Cr of Indian debt securities in Oct till date . On a cumulative basis, FII’S have sold Rupees 15017 Cr of Indian Equities till date for this calendar year and have sold Rupees 50892 Cr of Indian debt in this calendar year till date.
Benchmark Nifty declined 2.67% on Friday. DOW declined 180 points (0.68%) Y’day. Nikkei declined 0.80% and Hang seng declined 0.19% on Friday.
Euro is now at 1.1524, Pound at 1.3123,Yen at 113.72.
Commodities: Gold is now at USD 1206 and WT1Crude at USD 74.29.
Interest rates: USD 10 Yr yield is at 3.22% and 3 m libor closed at 2.39%. Indian 10 yr benchmark yield closed at 8.03%.
Economic news: RBI disappointed market expectation of 25 bps hike. Repo was unchanged at 6.5% with a calibrated tightening bias. Inflation forecast was reduced to 3.8-4.5% zone for second half of this fiscal due to benign food inflation. RBI Governor said that interest rate management is centered on inflation control and not on exchange rate movement. He added that exchange rate movement will be decided by market forces and RBI can intervene to smoothen the movement. This is a clear messsge that RBI is hoping for correction of trade distortion through a fall in Rupee. Indian Equity indices declined very steeply and maintained its recent momentum of decline.
Global Equity indices also declined on rising yields. Though Crude prices retreated from its recent highs, there is no clear evidence of further relief.
US unemployment rate dropped to 3.7% in September, down from 3.9% and beat expectation of 3.8%. That’s the lowest level in 49 years. However, last month job additions was lower than expected at 134k. Average hourly earnings grew 0.3% m/m and matched expectations.
Data Highlights: -US trade balance widened to -53.2 bn in Aug.
Monday’s calendar:- EU sentix investor confidence.
Daily Support/Resistance table
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
Technicals: Spot closed above 100 and 200 day major moving averages. 20 day moving is at 72.56. 50 day moving average is at 70.71. 200 day moving average is at 67.06. Daily MACD is in buy zone, implying bottom at 68.30 . Important support zone is at 72.90/72.40. Spot closed below its average level of the day.
Intra day supports and resistances for Oct contract are:
PP: 74,S1:73.55, S2:73.16, R1:74.39, R2:74.84.
Hedging strategy for USD/INR: Hedging decisions be taken according to comfort and accounting rates.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is below major moving averages. Next Major resistance is at 1.1820 and later at 1.1960. Major support is at 1.13. Daily MACD is in sell zone, implying an important top at 1.1820. Weekly MACD is in sell zone, implying important top at 1.2560.
GBP/USD: Trend is sideways in daily chart. Daily MACD is in sell zone, implying important top at 1.33 and weekly MACD is in sell zone, implying important top at 1.4375. The pair is trading below 200 day moving average. Important resistance is at 1.33 and later at 1.3560. Important support is at 1.2925 and later at 1.2785.
USD/YEN: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 109.70. Next important support is at 113.20/111.85. Important resistance is at 114.70.