FX MORNING UPDATE

 

                                                                               

USDINR opened  at 70.68 y’day and the pair traded in the 70.56-70.87 range. Spot USDINR closed at 70.84 y’day, unchanged for USD as against prior close of 70.84. RBI reference rate was fixed at 70.87 on Wednesday. Dec USD/INR closed at 70.94, loss of 4 ps for USD as compared to prior day’s close of 70.98. Dec Euro/INR closed at 79, GBP/INR at 93.35 and Yen/INR at 65.37. RBI bought USD to stem Rupee gains.

FII’S nett sold  Rs 917 Cr of Indian Equities in Dec . FII’S have nett bought Rs 82573 Cr of Indian Equities in this calendar Year till date. FII’S have nett bought Rs 1233 Cr of Indian debt securities in Dec. FII’S have nett bought Rs 40977 Cr of Indian debt in this calendar year till date.

Benchmark Nifty climbed 0.52% y’day. DOW climbed 220 points (0.79%) y’day. Nikkei climbed 0.14%  and Hang seng climbed 1.31% y’day.

Euro is now at 1.1177 ,Pound at 1.3479,Yen at 109.56.    

Commodities: Gold is now at USD 1473 and WT1Crude at USD 59.48./Brent at USD 64.64

Interest rates: USD 10 Yr yield is at 1.897% and 3 m libor closed at 1.92%. Indian 10 yr benchmark yield closed at 6.78%.

Economic news:  Indian IIP declined -3.8% in Oct m/m as against 4.3% in Sep. Mfrg declined -2.1%, consumer durables declined -18% and electricity sector declined 12.2%. Nov CPI climbed to 5.54% from 4.62% in Oct. Food price inflation soared to 10.1% in Nov.

ECB decided to leave the deposit rate unchanged at -0.5%. Meanwhile, the main refi rate and marginal lending rate also stay unchanged at 0% and 0.25%, respectively.

The pace of the asset purchase program, effective on November 1, also stays at 20B euro per month. On GDP, ECB has revised growth to +1.2% for this year, from September’s projection of +1.1%. GDP growth for 2020 is revised lower to +1.1%, from +1.2% estimated in September.  On inflation, headline CPI forecast is upgraded slightly to +1.2% (September: +1.1%) for this year, but the downgraded back to +1.1% (September: +1.2%) for 2020. 

UK Prime Minister Boris Johnson is on course to win a decisive election victory and put the U.K. on track to leave the European Union next month.

US President has almost signed off on phase 1 trade deal with China, averting imposition of tariffs on Chinese imports effective from Dec 15 th. Chinese Yuan jumped 1% and Asian markets are buoyant in early trade today.

Data highlights : – :- US CPI climbed 0.3% m/m.

-US PPI was flat m/m and weekly jobless claims jumped to 252k

-EU Industrial production declined -0.5% m/m.

Friday’s calendar: – US retail sales

USD/INR   70.87 70.56
EUR/USD 1.1177 1.1200 1.1103
GBP/USD 1.3479 1.3515 1.3052
USD/JPY 109.56 109.57 108.46

Daily Support/Resistance table

CurrencyPairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1162 1.1221 1.1259 1.1318 1.1124 1.1065 1.1027
GBP/USD 1.3347 1.3642 1.3810 1.4105 1.3179 1.2884 1.2716
USD/JPY 109.14

 

109.82 110.25 110.93 108.71 108.03 107.60

 

USD/INR 70.75 70.95 71.06   70.63 70.44  

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Curency Pair Supports Resistances Trend Remarks
EURO/USD 1.0990/1.0880 1.1120/1.1180 DN UP>1.1180
GBP/USD 1.2985 1.3180 UP DN<1.2765
USD/JPY 107.90/106.50 109.75/110.65 UP DN<107.90
USD/INR 70.55 71.30/71.65 DN UP>71.85
USD/CHF 0.9840 1.0030 UP DN<0.9840

Technicals: Spot closed above 100 and 200 day moving average. 20 day moving average       is at 71.55. 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 70.55 and next important resistance is at 71.30/71.65. Spot closed below its average level of the day.  

Intra day supports and resistances for Dec contract are:

PP: 70.86,S1:70.72, S2:70.51, R1:71.07, R2:71.21.                                         

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 1.1120/1.1180. Major support is at 1.0990/1.0940 and later at 1.0870. Daily MACD is in buy zone, implying an important bottom at 1.0990. Weekly MACD is in buy zone, implying important bottom at 1.0870.

GBP/USD: The pair is bullish and is above major moving averages.Daily MACD  is in buy zone, implying important bottom at 1.2765 and weekly MACD is  in buy zone, implying important bottom at 1.20. Important resistance is at 1.3180. Important support is at 1.2985 and later at 1.2740.

USD/YEN: The pair is above major moving averages. Daily MACD is in sell zone, implying important top at 109.75. Next important resistance is at 110.65. Important support is  at 108.25/107.85/ 106.50.

 

 

 

 

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