USDINR opened gap down at 70.93 on Wednesday and the pair traded in the 70.85-71.37 range. Spot USDINR closed at 71.28 on Wednesday, loss of 12 ps for USD as against prior close of 71.40. RBI reference rate was fixed at 71.23 on Tuesday. Aug USD/INR closed at 71.36, loss of 14 ps for USD as compared to prior day’s close of 71.50. Aug Euro/INR closed at 79.79, GBP/INR at 86.23 and Yen/INR at 67.25.
FII’S have nett sold Rs 9668 Cr of Indian Equities in Aug . FII’S have nett bought Rs 55832 Cr of Indian Equities in this calendar Year till date. FII’S have pulled out Rs 22000 Cr of Indian Equities since budget day. FII’S have nett bought Rs 1086 Cr of Indian debt securities in Aug FII’S have nett bought Rs 19869 Cr of Indian debt in this calendar year till date.
Benchmark Nifty climbed 0.95% on Wednesday. DOW climbed 99 points(0.39%) y’day. Nikkei declined 1.21% and Hang seng climbed 0.76% y’day.
Euro is now at 1.1102 ,Pound at 1.2088,Yen at 106.20.
Commodities: Gold is now at USD 1531 and WT1Crude at USD 55.10/Brent at USD 58.77.
Interest rates: USD 10 Yr yield is at 1.542% and 3 m libor closed at 2.26%. Indian 10 yr benchmark yield closed at 6.63%.
Economic news: US and European markets tanked on Wenesday on fears of recession and new friction between US and China. US President put Hong Kong situation and its handling as a new precondition for trade tariffs. Stock markets sold off sharply on Thursday morning after China warned that recent tariffs from the US threatened to derail trade talks.
China’s Ministry of Finance said in a statement that fresh 10% tariffs on $300bn of Chinese goods “seriously violated the consensus” between the US and China reached at the recent G20 meeting in June. “China will have to take the necessary countermeasures,” the Ministry said in a brief statement.
US 2 Year yield moved above 10 Year yield stoking fear of recession. Contraction in German output and Brexit uncertainity have added to Global turmoil.
India’s trade deficit narrowed to USD 13.43 billion in July 2019 from USD 18.63 billion in the same month last year and below market expectations of USD 15.70 billion. Merchandise exports rose 2.25 percent to USD 26.33 billion and imports were down 10.43 percent to USD 39.76 billion. In April-July 2019-20, the trade deficit narrowed to USD 59.39 billion from USD 65.27 billion in the same period of the previous fiscal year.
Data highlights : – US weekly jobless claims climbed to 220k and Ny mfrg index @ 4.8
-US retail sales climbed 0.7% m/m and industrial production declined -0.2% m/m.
-EU GDP climbed 0.2% y/y and industrial production declined -1.6% m/m.
-UK CPI climbed 2.1% y/y, RPI climbed 2.8% y/y and PPI(output) climbed 0.3% m/m.
-UK retail sales climbed 0.2% m/m.
Friday’s calendar: – US building permits and housing starts
Daily Support/Resistance table
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
Technicals: Spot closed above 50 and 100 day moving averages. 20 day moving average is at 69.64. 50 day moving average is at 69.33.200 day moving average is at 70.35. Daily MACD is in buy zone, implying bottom at 68.30. Important support is at 70.85/70.45 and next important resistance is at 71.80. Spot closed above its average level of the day.
Intra day supports and resistances for Aug contract are:
PP: 71.24,S1:71.03, S2:70.71, R1:71.56, R2:71.77
Hedging strategy for USD/INR: Hedging decisions be taken according to comfort and accounting rates.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is below major moving averages. Next Major resistance is at 1.1415. Major support is at 1.1025. Daily MACD is in sell zone, implying an important top at 1.1415. Weekly MACD is in sell zone, implying important top at 1.1415.
GBP/USD: The pair is bearish and is trading below major moving averages.Daily MACD is in sell zone, implying important top at 1.2580 and weekly MACD is in sell zone, implying important top at 1.3385. Important resistance is at 1.2210 and later at 1.2380. Important support is at 1.20.
USD/YEN: The pair is below major moving averages. Daily MACD is in sell zone, implying important top at 109. Next important resistance is at 109 and later at 110.50. Important support is at 104.50.