FX – MORNING UPDATE :

USDINR opened at 83.06 y’day and the pair traded in the 83.06-83.18 range. Spot USDINR closed at 83.16, loss of 1 ps for USD as against prior close of 83.17.

RBI reference rate was fixed at 83.15 on 25/10. Oct USD/INR closed at 83.17, unchanged for USD as compared to prior day’s close of 83.17. Oct Euro/INR closed at 87.99, GBP/INR at 100.91 and Yen/INR at 55.59. 1 year USDINR fwd premia was trading at around 1.72% p.a.  FX reserves declined by USD 3 bn and stood at USD 585 bn as on Oct 13 th.

In Oct, FPI’S have sold Rs 7476 Cr of Equities and bought Rs 5571 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 declined 159 points (0.83%) Y’day. US S&P declined 61 points (1.43%) . Nikkei climbed 0.60% and Hang Seng climbed 0.44%.

Euro is now at 1.0547, Pound at 1.2082, Yen at 150.41.

Commodities: Gold is now at USD 1985 and WT1Crude at USD 85/Brent at USD 90.

Interest rates: USD 10 Yr yield is at 4.96% and 3 m libor closed at 5.65%. Indian 10 yr benchmark yield closed at 7.34%.

Economic news: Indian Equities continued to slump on slower than expected Q/Q Corporate results. Surging US Yields and Middle east tensions also weighed on markets.

Focus is on ECB rate decision, US GDP and Core PCE data. Eurozone economy appears to be on shaky ground, with the latest PMI figures showing continued deterioration. Composite PMI declined to 35 month low of 46.5. Germany’s Gfk consumer sentiment for November fell from -26.7 to -28.1. UK Composite PMI slightly climbed, positioning at 48.6 from a previous 48.5.

Data highlights: – US PMI(mfrg) climbed to 50 and PMI(services) climbed to 50.9.

-US new home sales climbed to 759k.

-EU PMI(mfrg-flash) dipped to 43 and PMI(services- flash) declined to 47.8.

-UK PMI(mfrg- flash) improved to 45.2 and PMI(services-flash) dipped marginally to 49.2.

Thursday’s calendar : – US Weekly jobless claims, durables order, GDP and pending home sales.

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 83.21. 50 day moving average is at 83.02.200 day moving average is at 82.45. Daily MACD is in sell zone. Important support is at 83.03/82.80 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: 83.14, S1:83.09, S2:83.02, R1:83.21, R2:83.26.             

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 83.10 for 3 months.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below 100/200 day moving averages. Major resistance is at 1.0740/1.0815. Next major support is at 1.0595/1.0450. 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 1.2090/1.2035/1.18. Important resistance is at 1.2330/1.2440.

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.

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