FX – MORNING UPDATE :

USDINR opened at 83.24 Y’day and the pair traded in the 83.24-83.31 range. Spot USDINR closed at 83.30, gain of 2 ps for USD as against prior close of 83.28.

RBI reference rate was fixed at 83.28 on 09/11. Nov USD/INR closed at 83.31, gain of 2 ps for USD as compared to prior day’s close of 83.29. Nov Euro/INR closed at 89.03, GBP/INR at 102.15 and Yen/INR at 55.31. 1 year USDINR fwd premia was trading at around 1.52% p.a.  FX reserves climbed by USD 2.5 bn and stood at USD 586 bn as on Oct 27 th.  

In Nov, FPI’S have sold Rs 2979 Cr of Equities and bought Rs 1185 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 climbed 44 points (0.23%) y’day. US S&P declined 35 points (0.81%) . Nikkei climbed 1.59% and Hang Seng declined 0.33%.

Euro is now at 1.0710, Pound at 1.2285, Yen at 150.93.

Commodities: Gold is now at USD 1960 and WT1Crude at USD 75.70/Brent at USD 80.

Interest rates: USD 10 Yr yield is at 4.63% and 3 m libor closed at 5.64%. Indian 10 yr benchmark yield closed at 7.26%.

Economic news: Fed Chairman Powell said that central bank officials “are not confident” interest rates are high enough to tame inflation, and may not get much more help from improvements in the supply of goods, services and labor.

Fed member said that “a sustained rise in long-term rates can have a very substantial effect on real economic performance.” ECB member said that by holding interest rates steady “at their current level”, ECB anticipates a significant impact on taming inflation to target of 2%.

US Yields moved higher after a weak auction and Powell’s comments.

Crude Oil prices fell further as China slipped itno disinflation with CPI turning negative.

Data highlights: – US Weekly jobless claims declined to 217k.

Friday’s calendar : UK GDP, industrial and manufacturing production.

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 83.24. 50 day moving average is at 83.14.200 day moving average is at 82.47. Daily MACD is in buy 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 Nov contract are:

PP: 83.29, S1:83.27, S2:83.23, R1:83.33, R2:83.35.             

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, but above 50 day average. Major resistance is at 1.08. Next major support is at 1.0510. 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 100 and 200 day averages, but above 50 day average. 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 1.2070/1.2035. Important resistance is at 1.2440/1.2535.

USD/YEN: The pair is above 50 and 200 day major averages. Daily MACD is in sell zone, implying important top at 151.75. Important resistance is at 151.75 and support is at 148.60/146.