FX – MORNING UPDATE :

USDINR opened at 82.93 y’day and the pair traded in the 82.93-83.05 range. Spot USDINR closed at 83.02, gain of 11 ps for USD as against prior close of 82.91.

RBI reference rate was fixed at 82.94 on 19/03. Mar USD/INR closed at 83.03, gain of 12 ps for USD as compared to prior day’s close of 82.91. Mar Euro/INR closed at 90.09, GBP/INR at 105.34 and Yen/INR at 55.26. 1 year USDINR fwd premia was trading at around 1.56% 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 climbed 32 points (0.15%) y’day. US S&P climbed 29 points (0.56%) y’day. Nikkei climbed 0.66% and Hang Seng declined 1.24% y’day.

Euro is now at 1.0865, Pound at 1.2715, Yen at 151.22.

Commodities: Gold is now at USD 2158 and WT1Crude at USD 82/Brent at USD 87.

Interest rates: USD 10 Yr yield is at 4.29% and 3 m libor closed at 5.59%. Indian 10 yr benchmark yield closed at 7.08%.

Economic news:  Rupee declined to 83, as USD gained against majors. Fiscal year end payments, and falling Equities also weighed down on Rupee. In last few weeks, RBI seems to have intervened to stem Rupee gains.

Fed is meeting today 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.

EU Zew surveys showed that there is optimism on economic recovery due to expected rate cuts in June.

BoJ announced the termination of its Yield Curve Control framework and negative interest rate policy, signifying that these measures “have fulfilled their roles.”

Data highlights: – US Building permits and housing starts climbed to 1.52 mn respectively.

-EU and German Zew surveys climbed to 33.5 and 31.7 respectively.

Wednesday’s calendar : – EU Consumer confidence

-UK CPI, PPI(output) and RPI.

 Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above major moving averages.20 day moving average is at 82.88. 50 day moving average is at 82.99. 200 day moving average is at 82.89. Daily MACD is in buy zone. Important support is at 82.92/82.81/82.65 and important resistance is at 83.12. Spot closed above the average level of the day.

Intraday supports and resistances for March contract are:

PP: 83, S1:83.09, S2:83.14, R1:82.94, R2:82.86.             

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.

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