FX – MORNING UPDATE :
USDINR opened at 82.61 on Friday and the pair traded in the 82.60-82.77 range. Spot USDINR closed at 82.72, loss of 5 ps for USD as against prior close of 82.77.
RBI reference rate was fixed at 82.67 on 01/09. Sep USD/INR closed at 82.78, loss of 4 ps for USD as compared to prior day’s close of 82.82. Sep Euro/INR closed at 89.90, GBP/INR at 104.97 and Yen/INR at 57.20. 1 year USDINR fwd premia was trading at around 1.63% p.a. FX reserves stood at USD 594 bn as on Aug 25 th. FX reserves declined by USD 8 bn.
| PAIRS | RBI REF RATE (01/09) |
| USDINR | 82.67 |
| EURINR | 89.62 |
| GBPINR | 104.64 |
| JPYINR | 56.79 |
In Aug, FPI’S have bought Rs 17041 Cr of Equities and bought Rs 5009 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 181 points (0.94%) on Friday. US S&P climbed 8 points (0.18%) . Nikkei climbed 0.38% and Hang Seng climbed 0.07%.
Euro is now at 1.0849, Pound at 1.2673, Yen at 145.38.
Commodities: Gold is now at USD 1971 and WT1Crude at USD 85.55/Brent at USD 88.60.
Interest rates: USD 10 Yr yield is at 4.19% and 3 m libor closed at 5.65%. Indian 10 yr benchmark yield closed at 7.17%.
Economic news: US non-farm payroll employment grew 187k in August, above expectation of 170k. That’s notably lower than the average monthly gain of 271k over the prior 12 months.
Unemployment rate jumped from 3.5% to 3.8%, above expectation of 3.5%, marking the highest level in a year and a half. Number of unemployment persons increased by 514k to 6.4m. Labor force participation rate rose 0.2% to 62.8%, first increase since March.
Average hourly earning rose 0.2% mom, below expectation of 0.3% mom. Over the past 12 months, average hourly earnings have increased by 4.3% yoy.
US CPI and PPI are key events for the week.
Data highlights: – -US ISM (mfrg) remained in contraction mode at 47.6 and construction spending climbed 0.7% m/m.
-EU PMI(mfrg-final) climbed to 43.5 and UK PMI(mfrg-final) showed improvement to 43.
Monday’s calendar : German industrial production and Sentix investor confidence
| USD/INR | 82.77 | 82.60 | ||
| EUR/USD |
1.0786 |
1.0883 | 1.0771 | |
| GBP/USD |
1.2604 |
1.2714 | 1.2577 | |
| USD/JPY |
146.16 |
146.32 | 144.44 |
Daily Support/Resistance table
| Currency Pairs | Pivot | R1 | R2 | R3 | S1 | S2 | S3 |
| EURO/USD | 1.0810 | 1.0850 | 1.0920 | 1.0960 | 1.0740 | 1.07 | 1.063 |
| GBP/USD | 1.2630 | 1.2670 | 1.2760 | 1.2810 | 1.2540 | 1.2490 | 1.24 |
| USD/JPY | 145.66 | 146.88 | 147.51 | 148.74 | 145.02 | 143.80 | 143.17 |
| USD/INR | 82.69 | 82.79 | 82.86 | 82.61 | 82.52 |
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
| Currency Pair | Supports | Resistances | Trend | Remarks |
| EURO/USD | 1.0765/1.0635 | 1.0945/1.1065 | DN | UP>1.1070 |
| GBP/USD | 1.2350 | 1.28/1.30/1.3150 | DN | UP>1.2820 |
| USD/JPY | 144.50/142 | 147 | UP | SIDE<143.90 |
| USD/INR | 82.35/82.25 | 82.70/82.86/83.14 | SIDE | UP>82.70 |
| USD/CHF | 0.87/0.8550 | 0.8820 | DN | SIDE>0.8820 |
Technicals: Spot closed above 50 and 200 day moving averages.20 day moving average is at 82.81. 50 day moving average is at 82.40.200 day moving average is at 82.26. Daily MACD is in sell zone. Important support is at 82.55/82.35/82.25 and important resistance is at 82.86/83.14. Spot closed above the average level of the day.
Intraday supports and resistances for Sep contract are:
PP: 82.75, S1:82.67, S2:82.57, R1:82.85, 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 83.30/83.50. Imports be hedged at 82.35.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is below major moving averages. Major resistance is at 1.0925/1.1065/1.1140/1.1275.
GBP/USD: The pair is still above 200 day moving averages, but below 50 and 100 day averages. Daily MACD is in sell zone, implying important top at 1.3145 and weekly MACD is in sell zone, implying important top at 1.3145. Important support is at 1.2350. Important resistance is at 1.2820/1.30/1.3145.
USD/YEN: The pair is above 50 and 200 day major averages. Daily MACD is in buy zone, implying important bottom at 137.35. Important resistance is at 147 and support is at 144/142.