USDINR opened at 71.57 on Friday and the pair traded in the 71.57-71.87 range. Spot USDINR closed at 71.74 y’day, gain of 14 ps for USD as against prior close of 71.60. RBI reference rate was fixed at 71.51 on Thursday. Dec USD/INR closed at 71.89, gain of 11 ps for USD as compared to prior day’s close of 71.78. Dec Euro/INR closed at 79.20, GBP/INR at 92.78 and Yen/INR at 65.73.
FII’S nett bought Rs 23240 Cr of Indian Equities in Nov . FII’S have nett bought Rs 83490 Cr of Indian Equities in this calendar Year till date. FII’S have nett sold Rs 3414 Cr of Indian debt securities in Nov. FII’S have nett bought Rs 39744 Cr of Indian debt in this calendar year till date.
Benchmark Nifty declined 0.78% on Friday. DOW declined 112 points (-0.40%) on Friday. Nikkei declined 0.49% and Hang seng declined 2.03% on Friday
Euro closed the week at 1.1017 ,Pound at 1.2928,Yen at 109.58.
Commodities: Gold is now at USD 1470 and WT1Crude at USD 55.40./Brent at USD 60.75.
Interest rates: USD 10 Yr yield is at 1.776% and 3 m libor closed at 1.92%. Indian 10 yr benchmark yield closed at 6.47%.
Economic news: Indian Q2 GDP fell to 4.5% VS 5% in Q1, lowest in over 6 years. Mfrg declined 1%, agri grew by 2.1%. Gross capital formation was just 1% vs 11.8% in Q2 2018-19, implying anemic investment. Govt expenditure was higher by 15.6% vs 10.9% in Q2 2018-19, Private consumption grew only by 5.1% vs 9.8% in Q2 2018-19.
Govt has recently announced various measures including cut in corporate tax, AIF for real estate to help stuck projects, merger of banks and strategic sales in 5 PSU’S. Economists feel that heavy Govt spending is vital for economy to climb back. RBI rate cut has not translated into corresponding increase in Private spending, implying partial failure of rate transmission. Govt could cut personal taxes to spur consumption.
Crude prices declined 5% on reports that Russia may not extend cooperation to OPEC in supply cuts.
Data highlights : – No major data release.
Thursday’s calendar: – EU Flash CPI climbed more than expected by 1% y/y and German retail sales declined -1.9% m/m.
-Japanese industrial production contracted -4.2% m/m.
Daily Support/Resistance table
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
Technicals: Spot closed above 100 and 200 day moving average. 20 day moving average is at 71.47. 50 day moving average is at 71.24.200 day moving average is at 70.30. Daily MACD is in sell zone, implying top at 72.25. Important support is at 71.30/71 and next important resistance is at 72. Spot closed above its average level of the day.
Intra day supports and resistances for Dec contract are:
PP: 71.89,S1:71.73, S2:71.58, R1:72.04, R2:72.20.
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 1.11/1.1180. Major support is at 1.0990/1.0940 and later at 1.0870. Daily MACD is in sell zone, implying an important top at 1.11. Weekly MACD is in buy zone, implying important bottom at 1.0870.
GBP/USD: The pair is sideways but is still trading above 200 day moving average.Daily MACD is in sell zone, implying important top at 1.30 and weekly MACD is in buy zone, implying important bottom at 1.20. Important resistance is at 1.30/1.31. Important support is at 1.27 and later at 1.2550.
USD/YEN: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 108.25. Next important resistance is at 110.65. Important support is at 108.25/107.85/ 106.50./