FX – MORNING UPDATE :

USDINR opened at 83.30 y’day and the pair traded in the 83.30-83.36 range. Spot USDINR closed at 83.33, unchanged for USD as against prior close of 83.33.

RBI reference rate was fixed at 83.357 on 23/11. Nov USD/INR closed at 83.35, gain of 1 ps for USD as compared to prior day’s close of 83.34. Nov Euro/INR closed at 90.96, GBP/INR at 104.65 and Yen/INR at 55.88. 1 year USDINR fwd premia was trading at around 1.63% p.a.  FX reserves stood at USD 590.32 bn as on Nov 10 th.  

In Nov, FPI’S have bought Rs 1866 Cr of Equities and bought Rs 11531 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 closed flat (%) y’day. US S&P climbed 18 points (0.41%) on Wednesday . Nikkei is up 1% today and Hang Seng declined 1.13% y’day.

Euro is now at 1.0902, Pound at 1.2533, Yen at 149.60.

Commodities: Gold is now at USD 1992 and WT1Crude at USD 76.60/Brent at USD 81.60.

Interest rates: USD 10 Yr yield is at 4.45% and 3 m libor closed at 5.64%. Indian 10 yr benchmark yield closed at 7.27%.

Economic news: US market was closed for Thanksgiving.

ECB minutes reveal a consensus among “all members” to maintain the three key ECB interest rates unchanged. This decision reflects a shared confidence that current monetary stance was “sufficiently restrictive” for allowing the governing council to assess the “inflation outlook”, “dynamics of underlying inflation”, and “strength of monetary policy transmission”. ECB emphasized the need to remain “both persistent and vigilant.”

Earlier in the week, Fed minutes revealed that “The committee members were also unanimous in their view that restrictive policy stance should be maintained until inflation shows a sustainable decline towards Fed’s target. This highlights Fed’s focus on ensuring that inflationary pressures are adequately managed before considering any policy easing.

Data highlights: – US durables order declined 5.4% m/m, weekly jobless claims declined to 209k, consumer confidence improved marginally to -17.

-EU PMI (mfrg-flash) improved marginally to 43.2 and PMI(services-flash) remained in contraction mode at 48.2.

-UK PMI (mfrg-flash) improved to 46.7 and PMI(services-flash) jumped to expansion mode at 50.5.

Friday’s calendar : – US PMI

-German Ifo

Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above 50 day average and 200 day moving averages.20 day moving average is at 83.27. 50 day moving average is at 83.21.200 day moving average is at 82.55. Daily MACD is in buy zone. Important support is at 83.03/82.80 and important resistance is at 83.48. Spot closed at the average level of the day.

Intraday supports and resistances for Nov contract are:

PP: 83.33, S1:83.30, S2:83.27, R1:83.37, R2:83.39.             

Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.

However on directional basis, suggest the following:

USD exports be hedged at 83.40/83.50. 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 1.0960. Next major support is at 1.0830/1.0760. Daily MACD is in buy zone, implying an important bottom at 1.0450. Weekly MACD is in buy zone, implying important bottom at 1.0460.

GBP/USD: The pair is below 100 but above 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 1.2250. Important resistance is at 1.2560.

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 146.