FX MORNING UPDATE
USDINR opened at 71.24 Y’day and the pair traded in the 71.24-71.38 range. Spot USDINR closed at 71.37 y’day, gain of 15 ps for USD as against prior close of 71.22. RBI reference rate was fixed at 71.37 on Wednesday. Jan USD/INR closed at 71.54, gain of 8 ps for USD as compared to prior day’s close of 71.46. Jan Euro/INR closed at 80.17, GBP/INR at 94.41 and Yen/INR at 65.78. Rupee has spiked lower to 71.60 on reports that US air strike killed top Iranian commander in Baghdad. Crude has also surged higher.
FII’S nett bought Rs 7127 Cr of Indian Equities in Dec . FII’S have nett bought Rs 89583 Cr of Indian Equities in this calendar Year till date. FII’S have nett sold Rs 4352 Cr of Indian debt securities in Dec. FII’S have nett bought Rs 35392 Cr of Indian debt in this calendar year till date.
Benchmark Nifty climbed 0.82% y’day. DOW climbed 330 points (1.16%) y’day. Nikkei declined 0.76% and Hang seng climbed 1.25% y’day.
Euro is now at 1.1173 ,Pound at 1.3135,Yen at 108.16.
Commodities: Gold is now at USD 1541 and WT1Crude at USD 62.83/Brent at USD 68.16.
Interest rates: USD 10 Yr yield is at 1.895% and 3 m libor closed at 1.89%. Indian 10 yr benchmark yield closed at 6.50%.
Economic news: 1)Indian Current account deficit shrunk to 0.9% of GDP in JULY-SEP Quarter to USD 6.3 bn as against USD 14.2 bn in Q1 (2% of GDP). Lower trade deficit of USD 38.1 bn contributed to lower CAD. Trade deficit stood at USD 50 bn in the same period in last fiscal. CAD is now at 1.5% of GDP in first half of this fiscal as compared to 2.6% in H1 2018-19.
2)Dec GST Collections rose to 1.03 lac Cr, higher than Dec 2018.
3)Core sector declined by -1.5% in Dec, vs 5.1% growth in Dec 2018. Core sector growth is flat in this fiscal till date.
4)Car retail registrations rose beween 6 and 14% in the last 3 months. Car maker Maruti reported increase of 2.5% in production volume for Dec.
5)Indian FM announced 103 lac Cr spending by GOI, in the next 5 years with 22% pvt sector participation covering Ports, roads,railways, education, digital and health sectors.
Data highlights : – US weekly jobless claims was reported at 222k.
-EU PMI(mfrg) improved to 46.2.
-UK PMI(Mfrg) was reported at 47.5.
Friday’s calendar: – US ISM(mfrg) and construction spending
Daily Support/Resistance table
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
Technicals: Spot closed above 200 day moving average. 20 day moving average is at 71.12. 50 day moving average is at 71.26.200 day moving average is at 70.26. Daily MACD is in buy zone, implying bottom at 70.52. Important support is at 70.52 and next important resistance is at 71.65. Spot closed above its average level of the day.
Intra day supports and resistances for Jan contract are:
PP: 71.50,S1:71.44, S2:71.33, R1:71.60, R2:71.67.
Hedging strategy for USD/INR: Hedging decisions be taken according to comfort and accounting rates.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is above major moving averages. Next Major resistance is at 1.1185. Major support is at 1.1065/1.0990 and later at 1.0870. Daily MACD is in buy zone, implying an important bottom at 1.1065. Weekly MACD is in buy zone, implying important bottom at 1.0870.
GBP/USD: The pair has turned sideways but still above major moving averages.Daily MACD is in sell zone, implying important top at 1.3425 and weekly MACD is in buy zone, implying important bottom at 1.20. Important resistance is at 1.3425. Important support is at 1.2930 and later at 1.2760.
USD/YEN: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 108.40. Next important resistance is at 110.65. Important support is at 108.40/107.85/ 106.50