USDINR opened gap down at 71.01 on Friday and the pair traded in the 70.85-71.13 range. Spot USDINR closed at 70.93 y’day, loss of 20 ps for USD as against prior close of 71.13. RBI reference rate was fixed at 71.66 on Wednesday. Sep USD/INR closed at 71.04, loss of 21 ps for USD as compared to prior day’s close of 71.25. Sep Euro/INR closed at 78.92, GBP/INR at 88.45 and Yen/INR at 65.82.
Rupee gained 1.11% last week, tracking Yuan rally. US-China trade truce contributed to Rupee gains.
FII’S have nett sold Rs 2605 Cr of Indian Equities in Sep . FII’S have nett bought Rs 46768 Cr of Indian Equities in this calendar Year till date. FII’S have nett bought Rs 3279 Cr of Indian debt securities in Sep. FII’S have nett bought Rs 31882 Cr of Indian debt in this calendar year till date.
Benchmark Nifty climbed 0.85% y’day. DOW climbed 37 points(0.14%) y’day. Nikkei climbed 1.05% and Hang seng climbed 0.98% on Friday.
Euro closed the week at 1.1075 ,Pound at 1.2505,Yen at 108.09.
Commodities: Gold is now at USD 1488 and WT1Crude at USD 54.84./Brent at USD 60.15.
Interest rates: USD 10 Yr yield is at 1.903% and 3 m libor closed at 2.10%. Indian 10 yr benchmark yield closed at 6.64%.
Economic news: Indian exports declined 6.01% to 26.13 bn and Imports declined 13.45% in Aug to USD 39.58 bn. Trade deficit narrowed to USD 13.45 bn. In August, oil imports declined by 8.9 per cent to $10.88 billion, and non-oil imports fell by 15 per cent to $28.71 billion.
Cumulatively, during April-August 2019, exports were down 1.53 per cent to $133.54 billion, while imports contracted by 5.68 per cent to $206.39 billion.
FM announced new measures for housing and exports sectors.
For housing: 1) Special window funding to be set up as category AIF-II with Rs 10000 Cr investment by GOI and equal amount by outside investors. This will be available for affordable housing projects which are non NPA and non NCLT.
2)Govt employees will get loans linked to 10 Year G-SEC yield.
3)ECB norms to be relaxed for affordable housing projects.
1)Scheme for remission of duties or taxes on exports. Govt revenue foregone is Rs 50,000 Cr.
2)Fully automatic electronic refund for input tax credit in GST.
3)Reduce time to exports turnaround.
4)ECGC scheme to be expanded
5)Annual mega shopping festival at four places across India by March 2020.
FM says that GDP will improve by next quarter.
Data highlights : – US retail sales climbed 0.4% m/m.
Monday’s calendar: – NY mfrg index
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 71.62. 50 day moving average is at 70.20.200 day moving average is at 70.18. Daily MACD is in sell zone, implying top at 72.40. Important support is at 70.85/70.35 and next important resistance is at 71.35/71.65. Spot closed below its average level of the day.
Intra day supports and resistances for Aug contract are:
PP: 71.86,S1:71.68, S2:71.55, R1:71.99, R2:72.17
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 1.0840. 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 bullish and is trading above 50 day major moving average, but still below 200 day moving average.Daily MACD is in buy zone, implying important bottom at 1.20 and weekly MACD is in buy zone, implying important bottom at 1.20. Important resistance is at 1.2565/1.2645. Important support is at 1.2320/1.2265.
USD/YEN: The pair is between major moving averages. Daily MACD is in buy zone, implying important bottom at 104.45. Next important resistance is at 109.30. Important support is at 107.