USDINR opened at 73.69 y’day and the pair traded in the 73.47-73.78 range. Spot USDINR closed at 73.52 , loss of 13 ps for USD as against prior close of 73.65. RBI reference rate was fixed at 73.41 on Tuesday. Sep USD/INR closed at 73.64, loss of 7 ps for USD as compared to prior day’s close of 73.71. Sep Euro/INR closed at 87.40, GBP/INR at 95.49 and Yen/INR at 70.07.
FII’S have nett sold Rs 1152 Cr of Indian Equities in Sept till date . FII’S have nett bought Rs 1647 Cr of Indian debt securities in Sept till date. In this financial year, FII’S have nett bought Rs 85703 Cr of Equities and have sold Rs 39417 Cr in debt. In FY 19-20, FII’s have sold Rs 10200 Cr of Equities and 47393 cr of debt.
Benchmark Nifty climbed 0.68%. DOW climbed 36 points (0.13%).Nikkei declined 0.39% and Hang seng climbed 0.82%.
Euro is now at 1.1837,Pound at 1.2893,Yen at 105.28.
Commodities: Gold is now at USD 1953 and WT1Crude at USD 39.88./Brent at USD 42.
Interest rates: USD 10 Yr yield is at 0.685% and 3 m libor closed at 0.25%. Indian 10 yr benchmark yield closed at 6.03%.
Economic news: Indian trade deficit expanded to USD 6.77 bn in Aug. Exports declined 12.66% y/y to USD 22.7 BN. Imports contracted 26.04% to USD 29.47 bn.
Fed said it would keep interest rates near zero until inflation is on track to “moderately exceed” the central bank’s 2% inflation target “for some time,” with the aim of offsetting years of weak inflation and allowing the economy to add jobs for as long as possible. Fed Chairman said that economic recovery is ongoing at slow pace and requires continued Fed and Govt policy support.
OECD revised up 2020 global GDP forecast, expecting to contract -4.5%, 1.5% higher than June’s single hit scenario. US economy is expected to contract -3.8% only, up by 3.5% from June. Eurozone (at -7.9%, up by 1.2% from June), Japan (at -5.8%, up by 0.2%), UK at -10.1% (up by 1.4%) are just revised up slightly. India is expected to contract -10.2%.
OECD said: “After collapsing in the first half of the year, economic output recovered swiftly following the easing of measures to contain the COVID-19 pandemic and the initial re-opening of businesses. Policymakers reacted rapidly and massively to buffer the initial blow to incomes and jobs. But the pace of recovery has lost momentum over the summer. Restoring confidence will be crucial to how successfully economies can recover, and for this we need to learn to safely live with the virus.”
Data highlights : – US retail sales climbed less than expected by 0.6% m/m.
-UK CPI climbed 0.2% y/y, RPI climbed 0.5% y/y and PPI(output) was flat m/m.
Thursday’s calendar: – US Weekly jobless claims, building permits and housing starts
Daily Support/Resistance table
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
Technicals: Spot closed below 200 day moving average. 20 day moving average is at 73.76. 50 day moving average is at 74.45.200 day moving average is at 73.81. Daily MACD is in buy zone, implying bottom at 72.70. Important support is at 72.70 and important resistance is at 73.80 and later at 74.50. Spot closed below its average level of the day.
Intra day supports and resistances for Sep contract are:
PP:73.68,S1:73.50, S2:73.38, R1:73.81, R2: 73.98.
Hedging strategy for USD/INR: Hedging decisions be taken according to comfort and accounting rates.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is above 50 and 200 day major moving average. Next Major resistance is at 1.2018 and later at 1.21. Major support is at 1.1755 with next support at 1.1580. Daily MACD is in sell zone, implying an important top at 1.1967. Weekly MACD is in buy zone, implying important bottom at 1.0650.
GBP/USD: The pair is set to enter into bear territory. Daily MACD is in sell zone, implying important top at 1.3484 and weekly MACD is in buy zone, implying important bottom at 1.14. Important support is at 1.2670 . Important resistance is at 1.2980 and later at around 1.31.
USD/YEN: The pair is below major moving averages. Daily MACD is in buy zone, implying important bottom at 105.10. Next important resistance is at 107. Important support is at 105.10 and later at 104.10.
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