FX – MORNING UPDATE :
USDINR opened at 82.73 on Thursday and the pair traded in the 82.69-82.73 range. Spot USDINR closed at 82.73, loss of 12 ps for USD as against prior close of 82.85. FX market was closed on Friday.
RBI reference rate was fixed at 82.78 on 07/03. Mar USD/INR closed at 82.68, loss of 19 ps for USD as compared to prior day’s close of 82.87. Mar Euro/INR closed at 90.15, GBP/INR at 105.45 and Yen/INR at 56.14. 1 year USDINR fwd premia was trading at around 1.65% p.a. FX reserves stood at USD 625 bn, as on March 1 st. Reserves climbed USD 6 bn w/w.
|
PAIRS |
RBI REF RATE (07/03) |
|
USDINR |
82.78 |
|
EURINR |
90.23 |
|
GBPINR |
105.40 |
|
JPYINR |
55.70 |
In March, FPI’S bought Rs 9652 Cr of Equities and bought Rs 3532 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 20 points (0.09%) on Thursday. US S&P declined 33 points (0.65%) on Friday. Nikkei was up 0.25% and Hang Seng climbed 0.76% on Friday.
Euro is now at 1.0937, Pound at 1.2857, Yen at 147.07.
Commodities: Gold is now at USD 2179 and WT1Crude at USD 78/Brent at USD 82.
Interest rates: USD 10 Yr yield is at 4.07% and 3 m libor closed at 5.59%. Indian 10 yr benchmark yield closed at 7.03%.
Economic news: USDINR declined below long term averages as FII flows into Equities accelerated.
US non-farm payroll employment rose 275k in February, above expectation of 200k. However, January’s figure was revised sharply lower from 353k to 229k. Unemployment rate jumped from 3.7% to 3.9%, above expectation of being unchanged at 3.7%. Labor force participation rate was unchanged at 62.5% for the third consecutive month. Average hourly earnings rose 0.1% mom, below expectation of 0.2% mom.
USD declined due to higher-than-expected unemployment rate and downward revision of Jan data.
ECB maintained status quo, with downward revision to inflation forecasts. ECB now anticipates that headline inflation will return to its target by 2025 and drop below 2% in 2026. Several policymakers hinted at rate cuts by June. Some members indicated there is “large consensus” among officials on the inevitability of rate reductions, albeit with ongoing discussions about the precise timing. It is now acknowledged the prevailing conditions could pave the way for a shift to a less restrictive monetary stance.
Data highlights: – US Weekly jobless claims was reported at 217k.
-German factory orders declined 11.3% m/m.
-EU GDP was flat Q/Q.
Monday’s calendar : – No major data release.
|
USD/INR |
|
82.73 |
82.69 |
|
|
EUR/USD |
1.0937 |
1.0982 |
1.0919 |
|
|
GBP/USD |
1.2857 |
1.2895 |
1.2800 |
|
|
USD/JPY |
147.07 |
148.12 |
146.48 |
Daily Support/Resistance table
|
Currency Pairs |
Pivot |
R1 |
R2 |
R3 |
S1 |
S2 |
S3 |
|
EURO/USD |
1.0946 |
1.0973 |
1.1007 |
|
1.0910 |
1.0883 |
|
|
GBP/USD |
1.2850 |
1.2901 |
1.2945 |
|
1.2805 |
1.2755 |
|
|
USD/JPY |
147.22 |
147.96 |
148.86 |
|
146.32 |
145.56 |
|
|
USD/INR |
82.71 |
82.74 |
82.75 |
|
82.69 |
82.67 |
|
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
|
Currency Pair |
Supports |
Resistances |
Trend |
Remarks |
|
EURO/USD |
1.0875/1.0830 |
1.0990/1.1040 |
UP |
DN<1.0830 |
|
GBP/USD |
1.2710/1.2580 |
1.29/1.2975 |
UP |
DN<1.2580 |
|
USD/JPY |
146/144.35 |
149.20/151 |
SIDE |
DN<144.35 |
|
USD/INR |
82.60 |
82.95 |
DN |
SIDE>82.95 |
|
USD/CHF |
0.8675 |
0.89 |
UP |
DN<0.8675 |
Technicals: Spot closed below major moving averages.20 day moving average is at 82.93. 50 day moving average is at 83.04.200 day moving average is at 82.88. Daily MACD is in sell zone. Important support is at 82.60 and important resistance is at 82.95/83.12. Spot closed above the average level of the day.
Intraday supports and resistances for March contract are:
PP: 82.74, S1:82.62, S2:82.55, R1:82.80, R2:82.93.
Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.
However on directional basis, suggest the following:
USD exports be hedged at 82.85/82.95. Imports be hedged at 82.60 for 1 month.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is above major moving averages. Major resistance is at 1.0995/1.1040. Next major support is at 1.0875/1.0830. 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 1.2517 and weekly MACD is in buy zone, implying important bottom at 1.2517. Important support is at 1.2517. Important resistance is at 1.29/1.2995.
USD/YEN: The pair is below 50 day, but still above 200 day moving averages. Daily MACD is in sell zone, implying important top at 150.90. Important resistance is at 149.20/150.90 and support is at 146/144.35.
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