FX – MORNING UPDATE :
USDINR opened at 83.16 y’day and the pair traded in the 83.04-83.25 range. Spot USDINR closed at 83.08, loss of 18 ps for USD as against prior close of 83.26.
RBI reference rate was fixed at 83.25 on 20/09. Sep USD/INR closed at 83.12, loss of 24 ps for USD as compared to prior day’s close of 83.36. Sep Euro/INR closed at 89, GBP/INR at 102.84 and Yen/INR at 56.30. 1 year USDINR fwd premia was trading at around 1.78% p.a. FX reserves stood at USD 594 bn as on Sept 8 th.
|
PAIRS |
RBI REF RATE (20/09) |
|
USDINR |
83.25 |
|
EURINR |
88.99 |
|
GBPINR |
102.84 |
|
JPYINR |
56.28 |
In Sep, FPI’S have sold Rs 6715 Cr of Equities and bought Rs 1382 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 declined 231 points (1.15%) y’day. US S&P declined 42 points (0.94%) . Nikkei declined 0.73% and Hang Seng declined 0.49%.
Euro is now at 1.0636, Pound at 1.2315, Yen at 148.42.
Commodities: Gold is now at USD 1925 and WT1Crude at USD 89/Brent at USD 93.
Interest rates: USD 10 Yr yield is at 4.44% and 3 m libor closed at 5.65%. Indian 10 yr benchmark yield closed at 7.14%.
Economic news: US Fed kept rates on hold, but indicated one more rate hike by this Year end and expects higher rates to continue for longer time. Fed has hiked rates 11 times in this cycle. The effect of monetary tightening has brought Core PCE down to 4.3% from 4.7%. However, Fed has not declared victory on inflation. Rates could raise from 5.25%-5.5% zone to 5.5% to 5.75% by year end. Fed is expected to deliver two rates cuts next year to bring rate down to 5.1%. Fed expects Core PCE inflation to average 3.7% this year and decline to 2.6% in 2024. Unemployment rate is expected to average 3.8% this year and climb to 4.1% next year. GDP growth has been revised upwards to 2.1% from 1% for 2023 and to 1.5% for 2024 from 1%.
USD climbed, 10 Year yield rose to 4.43% and Equity indices tumbled 1% after Fed announcement.
BOE meeting is the key event for the day.
Data highlights: – UK CPI declined to 6.7% y/y,PPI(output) climbed 0.2% m/m and RPI declined modestly to 9.1% y/y. Core CPI moderated to 6.2% y/y.
Thursday’s calendar : US existing home sales and weekly jobless claims
-EU Consumer confidence.
|
USD/INR |
|
83.25 |
83.04 |
|
|
EUR/USD |
1.0636 |
1.0737 |
1.0648 |
|
|
GBP/USD |
1.2315 |
1.2422 |
1.2323 |
|
|
USD/JPY |
148.42 |
148.37 |
147.47 |
Daily Support/Resistance table
|
Currency Pairs |
Pivot |
R1 |
R2 |
R3 |
S1 |
S2 |
S3 |
|
EURO/USD |
1.0679 |
1.0710 |
1.0768 |
1.0799 |
1.0621 |
1.0590 |
1.0532 |
|
GBP/USD |
1.2358 |
1.2393 |
1.2457 |
1.2491 |
1.2294 |
1.2259 |
1.2195 |
|
USD/JPY |
148.05 |
148.63 |
148.95 |
149.53 |
147.73 |
147.15 |
146.84 |
|
USD/INR |
83.12 |
83.21 |
83.33 |
|
82.99 |
82.91 |
|
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
|
Currency Pair |
Supports |
Resistances |
Trend |
Remarks |
|
EURO/USD |
1.0635 |
1.0945/1.1065 |
DN |
SIDE>1.0740 |
|
GBP/USD |
1.21 |
1.2550/1.2620 |
DN |
SIDE>1.2550 |
|
USD/JPY |
144.50/142 |
151 |
UP |
SIDE<143.90 |
|
USD/INR |
82.80 |
83.35/83.47 |
UP |
SIDE<82.78 |
|
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 82.93. 50 day moving average is at 82.64.200 day moving average is at 82.32. Daily MACD is in buy zone. Important support is at 82.80 and important resistance is at 83.35. Spot closed below the average level of the day.
Intraday supports and resistances for Sep contract are:
PP: 83.16, S1:83.02, S2:82.92, R1:83.26, R2:83.40.
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 82.80 for 1 month.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is below major moving averages. Major resistance is at 1.0945/1.1065/1.1140/1.1275.
GBP/USD: The pair is below 50 and 200 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 1.21. Important resistance is at 1.2550/1.2620.
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 151 and support is at 144/142.