USDINR opened at 71.24 y’day and the pair traded in the 71.11-71.30 range. Spot USDINR closed at 71.20 Y’day, unchanged for USD as against prior close of 71.27. RBI reference rate was fixed at 71.25. Feb USD/INR closed at 71.30, loss of 5 ps for USD as compared to prior day’s close of 71.35. Feb Euro/INR closed at 78.56, GBP/INR at 92.50 and Yen/INR at 65.
FII’S nett bought Rs 13778 Cr of Indian Equities in Jan till date . FII’S have nett sold Rs 11373 Cr of Indian debt securities in Jan till date.
Benchmark Nifty climbed 0.37% y’day. DOW climbed 89 points (0.30%) Y’day. Nikkei climbed 2% and Hang seng declined 0.39% y’day.
Euro is now at 1.0983,Pound at 1.2938,Yen at 109.91.
Commodities: Gold is now at USD 1570 and WT1Crude at USD 51.27/Brent at USD 55.30.
Interest rates: USD 10 Yr yield is at 1.645% and 3 m libor closed at 1.89%. Indian 10 yr benchmark yield closed at 6.45%.
Economic news:. RBI left rates unchanged and stance accomodative. Growth forecast for 2020-21 fiscal has been downgraded to 6% from 6.5%. First half may witness growth of 5-5.5%, Q3 will see growth climbing to 6.2%. Inflation forecast has been revised upwards to 5-5.4% in H1 20-21. Q3 20-21 inflation may trend down to 3.2%. Higher onion prices have contributed to 2% in headline inflation and 3.8% in Food inflation.
Major steps: Incremental loans by banks from Jan 31 st till July end to Auto, Commercial housing and MSME’S will be exempted from CRR.
-Extension in date of commencement of real estate projects for genuine reasons will not be downgraded for asset classification.
-RBI will conduct 1-3 year repo rate operations to infuse liquidity and ensure that G-SEC rates are contained so that benchmarked loan rates will be maintained.
RBI Governor said that MCLR- Credit market rate transmission has been 55 bps as against 135 bps rate cut by RBI. In longer term rates, transmission has been 75 bps. In G-SEC, transmission has been 175-195 bps.
FX reserves swelled to USD 471 bn as on Feb 4 th as againt USD 418 bn last March.
Indian G-SEC yields softened as RBI Governor said that longer term repo will be conducted to ensure that yields remain soft.
ECB bulletin noted that Eurozone expansion will continue to be supported by “favourable financing conditions”. Risks remain “titled to the downside” in Eurozone due to ” geopolitical factors, rising protectionism and vulnerabilities in emerging market economies”. But the risks have “become what less pronounced”.
Data highlights : – US weekly jobless claims dipped to 202k.
Thursday’s calendar: – US Non farm payrolls.
Daily Support/Resistance table
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
Technicals: Spot closed above 200 day moving average. 20 day moving average is at 71.27. 50 day moving average is at 71.27.200 day moving average is at 70.39. Daily MACD is in sell zone, implying top at 71.65. Important support is at 71.10/70.73 and next important resistance is at 71.65. Spot closed at its average level of the day.
Intra day supports and resistances for Feb contract are:
PP: 71.32,S1:71.21, S2:71.12, R1:71.41, R2:71.52
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 1.1240. Major support is at 1.0990 and later at 1.0870. Daily MACD is in sell zone, implying an important top at 1.1240. 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 1.3285 and weekly MACD is in buy zone, implying important bottom at 1.20. Important resistance is at 1.3285. Important support is at 1.2840 and later at 1.27.
USD/YEN: The pair is above major moving averages. Daily MACD is in sell zone, implying important top at 110.30. Next important resistance is at 110.30. Important support is at 108.50/107.70/ 106.50.