FX – MORNING UPDATE :

USDINR opened at 83.08 y’day and the pair traded in the 83-83.17 range. Spot USDINR closed at 83.07, loss of 1 ps for USD as against prior close of 83.08.

RBI reference rate was fixed at 83.15 on 21/09. Sep USD/INR closed at 83.06, loss of 6 ps for USD as compared to prior day’s close of 83.12. Sep Euro/INR closed at 88.46, GBP/INR at 101.87 and Yen/INR at 56.24. 1 year USDINR fwd premia was trading at around 1.74% p.a.  FX reserves stood at USD 594 bn as on Sept 8 th.

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 159 points (0.80%) y’day. US S&P declined 72 points (1.64%) . Nikkei declined 1.22% and Hang Seng declined 1.45%.

Euro is now at 1.0648, Pound at 1.2275, Yen at 147.62.

Commodities: Gold is now at USD 1922 and WT1Crude at USD 90/Brent at USD 93.50.

Interest rates: USD 10 Yr yield is at 4.50% and 3 m libor closed at 5.65%. Indian 10 yr benchmark yield closed at 7.18%.

Economic news: BOE left rates unchanged at 5.25%. The accompanying commentary noted the Bank of England’s worsening outlook for GDP growth and signs of deterioration in the labor market. In addition, the central bank expects inflation to slow significantly in the near term. The statement implies that BOE has done with rate tightening cycle.

Pound declined to 1.2250 levels and is below the key 200 day average. US Equity markets slumped on prospects of higher rates for a longer period and rising treasury yield.

Data highlights: – US existing home sales dipped to 4.04 mn and weekly jobless claims declined to 201k.

-EU Consumer confidence declined to -18.

Friday’s calendar : US PMI(mfrg)

-EU PMI(mfrg-flash) and PMI(services- flash)

-UK PMI(mfrg-flash) and PMI(services- flash)

Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above 50 and 200 day moving averages.20 day moving average is at 82.95. 50 day moving average is at 82.65.200 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: 83.08, S1:82.97, S2:82.89, R1:83.16, R2:83.27.             

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 82.80/82.65 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. Next major support is at 1.05. Daily MACD is in sell zone, implying an important top at 1.1275. Weekly MACD is in sell zone, implying important top at 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.