FX MORNING UPDATE

USDINR opened at 83.43 on Friday and the pair traded in the 83.26-83.44 range. Spot USDINR closed at 83.32, loss of 8  ps for USD as against prior close of 83.40.

RBI reference rate was fixed at 83.41 on 05/04. Apr USD/INR closed at 83.35, loss of 16 ps for USD as compared to prior day’s close of 83.51. Euro/INR closed at 90.30, GBP/INR at 105.27 and Yen/INR at 55.02. 1 year USDINR fwd premia was trading at around 1.62% p.a.  FX reserves stood at USD 645.58 bn, as on March 29 th.

In April, FPI’S sold Rs 2680 Cr of Equities and sold Rs 3508 Cr of debt . In FY 23-24, FII’S have net bought Rs 206279 Cr of Equities and have net bought Rs 123120 Cr of debt.

Benchmark Nifty closed flat (0%) on Friday. US S&P climbed 57 points (1.11%) on Friday. Nikkei declined 2.03% and Hang Seng closed flat on Friday.

Euro is now at 1.0838, Pound at 1.2640, Yen at 151.62.

Commodities: Gold is now at USD 2329 and WT1Crude at USD 87/Brent at USD 91.

Interest rates: USD 10 Yr yield is at 4.40% and 3 m libor closed at 5.59%. Indian 10 yr benchmark yield closed at 7.12%.

Economic news: RBI maintained status quo on repo rates. Repo is at 6.5%. GDP is expected to be 7% in FY25 and inflation is expected to average 4.5% in FY 25.

US non-farm payroll employment grew 303k in March, well above expectation of 205k. That’s also much higher than the average monthly gains of 231k over the prior 12 months.Unemployment rate ticked down from 3.9% to 3.8%, below expectation of 3.9%. Participation rate rose from 62.5% to 62.7%.Average hourly earnings rose 0.3% mom, matched expectations. Over the past 12 months, average hourly earnings have increased by 4.1 yoy.

US Yields surged, stocks rose and USD swung in a small tight range against majors.

Indian CPI, IIP and US CPI and PPI are important events for the week.

Data highlights: -EU retail sales declined -0.5% m/m. German factory orders climbed 0.2% m/m.

-UK PMI(construction) climbed to 50.2.

Monday’s calendar : – EU sentix investor confidence

Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above major moving averages.20 day moving average is at 83.10. 50 day moving average is at 83.04. 200 day moving average is at 82.91. Daily MACD is in buy zone. Important support is at 83.27/83.20 and important resistance is at 83.70. Spot closed below the average level of the day.

Intraday supports and resistances for April contract are:

PP: 83.38, S1:83.27, S2:83.19, R1:83.46, R2:83.57.             

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

However on directional basis, suggest the following:

USD imports be hedged on decline to 83.27.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is between moving averages. Major resistance is at 1.0875/1.10. Next major support is at 1.0725. Daily MACD is in buy zone, implying an important support at 1.0725. Weekly MACD is in sell zone, implying important top at 1.1140.

GBP/USD: The pair is between major moving averages. Daily MACD is in buy zone, implying important bottom at 1.2535 and weekly MACD is in sell zone, implying important top at 1.2895. Important support is at 1.2535. Important resistance is at 1.2685/1.28.

USD/YEN: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 146.50. Important resistance is at 152 and support is at 149/146.50.

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