USDINR opened at 73.03 y’day and the pair traded in the 73.04-72.60 range. Spot USDINR closed at 72.84 , gain of 12 ps for USD as against prior close of 72.72. RBI reference rate was fixed at 73.29 on 01/03. Mar USD/INR closed at 72.99, loss of 15 ps for USD as compared to prior day’s close of 73.14. Mar Euro/INR closed at 87.98, GBP/INR at 101.73 and Yen/INR at 68.04.
FII’S nett bought Rs 27918 Cr of Indian Equities in Feb (as on 26/2) . FII’S nett sold Rs 692 Cr of Indian debt securities in Feb (as on 26/2) . In this financial year, FII’S have nett bought Rs 258565 Cr of Equities and have sold Rs 30624 Cr in debt. In FY 19-20, FII’s sold Rs 10200 Cr of Equities and 47393 cr of debt.
Benchmark Nifty declined 1.08% y’day. DOW declined 345 points(1.11%).Nikkei declined 2.13% and Hang seng declined 2.15% .
Euro is now at 1.1953,Pound at 1.3870,Yen at 107.83.
Commodities: Gold is now at USD 1686 and WT1Crude at USD 64/Brent at USD 66.80.
Interest rates: USD 10 Yr yield is at 1.56% and 3 m libor closed at 0.23%. Indian 10 yr benchmark yield closed at 6.22%.
Economic news: Rupee volatility continued. USDINR had a range of 44 ps y’day. Rupee weakened 12 ps towards close on positional squaring off. Rupee’s gains contradicts USD strength against majors. Hence, the present rally is flow based and hence could suffer reversal once temporary flows tapers off.
Federal Reserve Chairman Jerome Powell said y’day that the recent spike in U.S. rates was “notable” but stressed the central bank would continue the current pace of bond buying and low-level interest environment until substantial progress is made on its job creation and inflation goals. Powell said the pace of the increase in rates last week “was something that was notable and caught my attention,” but suggested the central bank is unlikely to step up its pace of bond buying. “For asset purchases, they’ll continue at least at the current level, until we achieve substantial further progress toward our goals. That’s actual progress, not forecast progress,” he added. 10 Year yield surged to 1.56% and dragged Equities lower.
Focus is on Global yields and US employment data.
Data highlights: – US factory orders climbed 2.6% m/m and weekly jobless claims was reported at 745k.
-EU retail sales declined -5.9% m/m and unemployment rate dipped to 8.1%.
-UK PMI(construction) climbed to 53.3.
Thursday’s calendar: –
Daily Support/Resistance table
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
Technicals: Spot closed above 50,100 day moving averages but still below 200 day moving average. 20 day moving average is at 72.84. 50 day moving average is at 73.04.07.200 day moving average is at 74.15. Daily MACD is in buy zone, implying bottom at 72.30. Important support is at 72.30 and important resistance is at 73.20/73.80 . Spot closed above its average level of the day.
Intra day supports and resistances for Mar contract are:
PP:73.04,S1:72.74, S2:72.51, R1:73.28, R2: 73.57
Hedging strategy : Hedging decisions be taken according to comfort and accounting rates.
However on directional basis, suggest the following:
Upside break of 74 could end Rupee’s multi month upward trend. Expect 72.30-73.80 trading range till either side is broken.
Importer hedging should be done on dips to 72.30 and exports can be sold till 73.80 is not broken. If 73.80 is broken, exporters could wait for a higher level to hedge.
EURINR is delicately poised. Downside break of 87.50 could signal furher losses. Exporters can hedge on uptick to 89 and importers can buy EURINR for hedging till 87.50. If 87.50 is broken on the downside, importers can wait for lower levels to hedge imports.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is below 50 moving average, but above 100 and 200 day moving average. Major resistance is at 1.2150. Major support is at 1.1950. Daily MACD is in buy zone, implying an important bottom at 1.1950. Weekly MACD is in buy zone, implying important bottom at 1.1610.
GBP/USD: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 1.3565 and weekly MACD is in buy zone, implying important bottom at 1.2675. Important support is at 1.3760/1.3565 . Important resistance is at 1.4250.
USD/YEN: The pair is above 50 and 200 day major moving averages. Daily MACD is in buy zone, implying important bottom at 104.40. Next important resistance is at 107.20. Important support is at 105.80/104.90.
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