FX – MORNING UPDATE :

USDINR opened at 83.06 Y’day and the pair traded in the 83.03-83.20 range. Spot USDINR closed at 83.10, loss of 22 ps for USD as against prior close of 83.32.

RBI reference rate was fixed at 83.12 on 15/11. Nov USD/INR closed at 83.32, loss of 2 ps for USD as compared to prior day’s close of 83.34. Nov Euro/INR closed at 89.10, GBP/INR at 102.07 and Yen/INR at 55.11. 1 year USDINR fwd premia was trading at around 1.52% p.a.  FX reserves climbed by USD 4 bn and stood at USD 590.78 bn as on Nov 3 rd.  

In Nov, FPI’S have sold Rs 5372 Cr of Equities and bought Rs 5254 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 231 points (1.19%) y’day. US S&P climbed 7 points (0.16%) . Nikkei climbed 2.51% and Hang Seng climbed 3.71%.

Euro is now at 1.0873, Pound at 1.2483, Yen at 150.66.

Commodities: Gold is now at USD 1960 and WT1Crude at USD 76/Brent at USD 80.

Interest rates: USD 10 Yr yield is at 4.51% and 3 m libor closed at 5.64%. Indian 10 yr benchmark yield closed at 7.23%.

Economic news: Rupee gained at open y’day, but weakened to 83.18 on import demand at lower levels. Decline in USD index and rally in stock market boosted positive sentiment for Rupee.

US PPI for final demand fell -0.5% mom in October, below expectation of 0.1% mom rise. That’s also the largest monthly decline since April 2020. US retail sales fell -0.1% mom to USD 705.0B in October, better than expectation of -0.3% mom. 

EU downgraded 2023 GDP growth to 0.6% from 0.8%.

UK CPI showed a marked slowdown in October, dipping below market expectations. The annual CPI rate decelerated from 6.7% yoy to 4.6% yoy. CPI goods annual rate, which plummeted from 6.2% yoy to 2.9% yoy. 

Data highlights: – US PPI was flat m/m, retail sales declined -0.1% m/m.

-EU Industrial production declined 1.1% m/m.

-UK CPI declined to 4.6% y/y, RPI climbed 6.1% y/y and PPI(output) remained steady at 0.1% m/m.

Thursday’s calendar : US Weekly jobless claims and industrial production.

 Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed below 50 day average but above 200 day moving averages.20 day moving average is at 83.25. 50 day moving average is at 83.18.200 day moving average is at 82.52. Daily MACD is in buy zone. Important support is at 83.03/82.80 and important resistance is at 83.35. Spot closed below the average level of the day.

Intraday supports and resistances for Nov contract are:

PP: 83.11, S1:83.02, S2:82.93, R1:83.20, R2:83.29.             

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 83.05 for 3 months.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is above all major moving averages. Major resistance is at 1.0940. Next major support is at 1.0675. 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 1.2185. Important resistance is at 1.2535.

USD/YEN: The pair is above 50 and 200 day major averages. Daily MACD is in sell zone, implying important top at 152. Important resistance is at 152 and support is at 148.60/146.