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 82.89, gain of 4 ps for USD as against prior close of 82.85.

RBI reference rate was fixed at 82.89 on 15/03. Mar USD/INR closed at 82.87, gain of 1 ps for USD as compared to prior day’s close of 82.86. Mar Euro/INR closed at 90.28, GBP/INR at 105.67 and Yen/INR at 55.83. 1 year USDINR fwd premia was trading at around 1.62% p.a.  FX reserves stood at USD 636 bn, as on March 8 th. Reserves climbed USD 11 bn w/w.

In March, FPI’S bought Rs 38538 Cr of Equities and bought Rs 10599 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 declined 123 points (0.56%) on Friday. US S&P declined 33 points (0.65%) on Friday. Nikkei declined 0.33% and Hang Seng declined 1.42% y’day.

Euro is now at 1.0888, Pound at 1.2735, Yen at 149.07.

Commodities: Gold is now at USD 2155 and WT1Crude at USD 81/Brent at USD 85.

Interest rates: USD 10 Yr yield is at 4.30% and 3 m libor closed at 5.59%. Indian 10 yr benchmark yield closed at 7.06%.

Economic news:  Trade deficit widened in Feb to USD 18.71 bn from Jan data of USD 17.49 bn. Exports expanded to USD 41.40 bn from USD 36.92 bn in Jan. Imports also rose to USD 60.11 bn from USD 54.41 bn. Services exports was flat at USD 32.8 bn and services imports declined to USD 15.39 bn. In this financial year so far, that is from April to February, merchandise exports contracted by 3.45% during February, while imports contracted by 5.32%. Services exports rose 6.76% and imports contracted 1.95% during the same period. Overall trade deficit, including merchandise and services, stood at $72.24 billion during the April 2023-February 2024 period, down from $116.13 billion in the year-ago period. India’s merchandise exports are at $394.99 billion, down 3.45%, while merchandise imports stood at $620.19 billion, down 5.32%

Fed is meeting this week and would mull recent data. Higher than expected CPI, PPI data and strong retail sales could delay Fed’s move to consider rate cuts. Recent data suggests that inflation has not abated to Fed’s comfort and consumer spending is still hot.

Data highlights: – US industrial production climbed 0.1% m/m.

Monday’s calendar : – No major data release.

 Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed near major moving averages.20 day moving average is at 82.89. 50 day moving average is at 83.200 day moving average is at 82.89. Daily MACD is in buy zone. Important support is at 82.65 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: 82.91, S1:82.83, S2:82.78, R1:82.95, R2:83.04.             

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

However on directional basis, suggest the following:

USD exports be hedged at 82.95. Imports be hedged at 82.65 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 1.0830. 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 1.26/1.2515. Important resistance is at 1.29/1.2995.

USD/YEN: The pair is below 20 day, but still above 50 and 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.