FX MORNING UPDATE
USDINR opened at 71.36 Y’day and the pair traded in the 71.48-71.61 range. Spot USDINR closed at 71.55 y’day, loss of 16 ps for USD as against prior close of 71.71. RBI reference rate was fixed at 71.64 on Tuesday. Aug USD/INR closed at 71.58, loss of 19 ps for USD as compared to prior day’s close of 71.77. Aug Euro/INR closed at 79.51, GBP/INR at 86.86 and Yen/INR at 67.26.
FII’S have nett sold Rs 9049 Cr of Indian Equities in Aug . FII’S have nett bought Rs 56450 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 11843 Cr of Indian debt securities in Aug FII’S have nett bought Rs 30625 Cr of Indian debt in this calendar year till date.
Benchmark Nifty declined 0.89% y’day. DOW climbed 240 points(0.93%) y’day. Nikkei declined 0.28% and Hang seng climbed 0.15% Y’day.
Euro is now at 1.1090 ,Pound at 1.2132,Yen at 106.44.
Commodities: Gold is now at USD 1500 and WT1Crude at USD 55.60/Brent at USD 60.20.
Interest rates: USD 10 Yr yield is at 1.576% and 3 m libor closed at 2.26%. Indian 10 yr benchmark yield closed at 6.57%.
Economic news: RBI minutes showed that the MPC was concerned about economic slowdown and supported aggressive rate cuts. The committee also noted slow down in service sector.
Federal Reserve policymakers highlighted concerns about slowing global growth and trade tensions as headwinds, but stopped short of suggesting that a series of rate cuts should follow, according to the minutes of the Federal Reserve’s July meeting released Wednesday.
The Fed suggested that the best course of action would be to remain “flexible” and monitor incoming economic data amid uncertainty over when risks weighing on the economy, including the U.S.-China trade war would be resolved.
Data highlights : -US existing home sales is reported at 5.42 mn.
Thursday’s calendar: – US weekly jobless claims, consumer confidence
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 70.16. 50 day moving average is at 69.54.200 day moving average is at 70.30. Daily MACD is in buy zone, implying bottom at 68.30. Important support is at 71.45/70.85 and next important resistance is at 72.10/72.45. Spot closed below its average level of the day.
Intra day supports and resistances for Aug contract are:
PP: 71.54,S1:71.42, S2:71.28, R1:71.69, R2:71.80
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 1.1250 Major support is at 1.1025. Daily MACD is in sell zone, implying an important top at 1.1250. 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 buy zone, implying important bottom at 1.2050 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 buy zone, implying important bottom at 105. Next important resistance is at 109 and later at 110.50. Important support is at 105