FX – MORNING UPDATE :
USDINR opened at 83.97 on Friday and the pair traded in the 83.92-83.97 range. Spot USDINR closed at 83.95, loss of 3 ps for USD as against prior close of 83.98.
RBI reference rate was fixed at 83.93 on 06/09. Sept USD/INR closed at 84, loss of 3 ps for USD as compared to prior day’s close of 84.03. Sep Euro/INR closed at 93.40, GBP/INR at 110.59 and Yen/INR at 58.65 . 1 year USDINR fwd premia was trading at around 2.16% p.a. FX reserves stood at USD 684 bn, as on Aug 3O th. Reserves climbed US D 3.45 bn w/w.
|
PAIRS |
RBI REF RATE (06/09) |
|
USDINR |
83.93 |
|
EURINR |
93.31 |
|
GBPINR |
110.63 |
|
JPYINR |
58.95 |
In Aug , FPI’S have bought Rs 9477 Cr of Equities and bought Rs 200 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 declined 293 points (1.17%) on Friday. US S&P declined 95 points (1.73%) on Friday. Nikkei declined 0.62% and Hang Seng closed flat..
Euro is now at 1.1083, Pound at 1.3123, Yen at 142.27.
Commodities: Gold is now at USD 2516 and WT1Crude at USD 68/Brent at USD 71.
Interest rates: USD 10 Yr yield is at 3.71% and 3 m libor closed at 5.20%. Indian 10 yr benchmark yield closed at 6.97%.
Economic news: US Nonfarm payrolls showed signs of cooling labor market, but did not stoke fears of a severe economic downturn. Aug employment was at 142k and unemployment rate dipped to 4.2% and average earnings climbed 0.4% m/m. Growth was also well below the average monthly gain of 202k over the prior 12 months. Previous month’s growth was revised down from 114k to 89k. Market expectations of 50 bps cut in next Fed meeting has climbed over 50%.
US Equities have continued their September bearish trend as historic seasonality suggested. Leading Wall Street indexes were all red for the week with the Nasdaq down around 5.6%, the S&P down 4% and the DJIA down around 2.84%.
US CPI is the next important data to decide on quantum of first rate cut.
ECB is also expected to cut rates as economic conditions are tepid and inflation is cooling. BOE is expected to hold rates as UK economy bounced back strongly in the first half of 2024 and with wage growth and services inflation still elevated, the BoE can afford to pause after cutting rates for the first time this cycle in August.
Data highlights: – -German industrial production declined 2.4% m/m.
Monday’s calendar : – EU sentix investor confidence.
|
USD/INR |
|
83.97 |
83.92 |
|
|
EUR/USD |
1.1083 |
1.1155 |
1.1065 |
|
|
GBP/USD |
1.3123 |
1.3240 |
1.3109 |
|
|
USD/JPY |
142.27 |
143.92 |
141.78 |
Daily Support/Resistance table
|
Currency Pairs |
Pivot |
R1 |
R2 |
R3 |
S1 |
S2 |
S3 |
|
EURO/USD |
1.1101 |
1.1137 |
1.1191 |
|
1.1047 |
1.1011 |
|
|
USD/JPY |
142.65 |
143.53 |
144.79 |
|
141.38 |
140.51 |
|
|
GBP/USD |
1.3157 |
1.3205 |
1.3288 |
|
1.3074 |
1.3027 |
|
|
USD/INR |
83.95 |
83.97 |
84 |
|
83.93 |
83.90 |
|
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
|
Currency Pair |
Supports |
Resistances |
Trend |
Remarks |
|
EURO/USD |
1.1035/1.0950 |
1.1210/1.1340 |
UP |
DN<1.0950 |
|
GBP/USD |
1.3045/1.2925 |
1.3270/1.3450 |
UP |
SIDE<1.3045 |
|
USD/JPY |
142/139 |
149/152 |
DN |
SIDE>149 |
|
USD/INR |
83.76/83.65 |
84.10/84.30 |
UP |
SIDE<83.76 |
|
USD/CHF |
0.84 |
0.86/0.8730 |
DN |
SIDE>0.8730 |
Technicals: Spot closed above 50 and 200 day moving averages.20 day moving average is at 83.92. 50 day moving average is at 83.76. 200 day moving average is at 83.37. Daily MACD is in sell zone. Important support is at 83.75/83.65 and important resistance is at 84.10/84.30. Spot closed at the average level of the day.
Intraday supports and resistances for Sep contract are:
PP: 84., S1:83.98, S2:83.9475, R1:84.025, R2:84.0525.
Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.
However on directional basis, suggest the following:
USD exports be hedged above 84.20+.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is above major moving averages. Major resistance is at 1.1205/1.1340. Next major support is at 1.1035/1.0950. Daily MACD is in sell zone, implying an important top at 1.1205. Weekly MACD is in buy zone, implying important bottom at 1.06.
GBP/USD: The pair is above moving averages. Daily MACD is in buy zone, implying important bottom at 1.2650 and weekly MACD is in buy zone, implying important bottom at 1.23. Important support is at 1.3050/1.2925. Important resistance is at1.3270/1.3450.
USD/YEN: The pair is below major averages. Daily MACD is in buy zone, implying important bottom at 141.65. Important resistance is at 149/152 and support is at 141.65/139.
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