FX – MORNING UPDATE :

USDINR opened at 83.21 y’day and the pair traded in the 83.13-83.24 range. Spot USDINR closed at 83.19, loss of 6 ps for USD as against prior close of 83.25.

RBI reference rate was fixed at 83.23 on 11/10. Oct USD/INR closed at 83.25, loss of 7 ps for USD as compared to prior day’s close of 83.32. Oct Euro/INR closed at 88.30, GBP/INR at 102.31 and Yen/INR at 56.15. 1 year USDINR fwd premia was trading at around 1.83% p.a.  FX reserves declined by USD 3 bn and stood at USD 587 bn as on Sept 29 th.

In Oct, FPI’S have sold Rs 5132 Cr of Equities and bought Rs 1222 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 climbed 121 points (0.62%) y’day. US S&P climbed 18 points (0.43%) . Nikkei climbed 0.55% and Hang Seng climbed 1.27%.

Euro is now at 1.0622, Pound at 1.2315, Yen at 149.10.

Commodities: Gold is now at USD 1876 and WT1Crude at USD 83/Brent at USD 85.

Interest rates: USD 10 Yr yield is at 4.57% and 3 m libor closed at 5.65%. Indian 10 yr benchmark yield closed at 7.32%.

Economic news: Fed officials pointed to uncertainties around the economy, oil prices and financial markets as supporting “the case for proceeding carefully in determining the extent of additional policy firming that may be appropriate,” according to the minutes released on Wednesday from the Sept. 19-20 meeting.

ECB’s latest Consumer Expectations Survey for August paints a picture of an economy where consumers anticipate higher inflation rates but remain pessimistic about economic growth.

Indian CPI, IIP and US CPI are key data events for the day/week.

Data highlights: – US PPI climbed 0.5% m/m.

Thursday’s calendar : US weekly jobless claims and CPI

-UK industrial and manufacturing production.

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 83.14. 50 day moving average is at 82.95.200 day moving average is at 82.42. Daily MACD is in sell zone. Important support is at 82.80 and important resistance is at 83.35. Spot closed above the average level of the day.

Intraday supports and resistances for Oct contract are:

PP: 83.25, S1:83.20, S2:83.15, R1:83.30, R2:83.35.             

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 82.80/82.75 for 1 month.

 CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below major moving averages. Major resistance is at 1.0740/1.0945. Next major support is at 1.0450/1.0250. Daily MACD is in buy zone, implying an important bottom at 1.0450. 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 buy zone, implying important bottom at 1.2035 and weekly MACD is in sell zone, implying important top at 1.3145. Important support is at 1.2035/1.18. Important resistance is at 1.2440/1.2495.

USD/YEN: The pair is above 50 and 200 day major averages. Daily MACD is in sell zone, implying important top at 150.20. Important resistance is at 150.20 and support is at 147.50/146.50.