USDINR opened at 72.40 on Friday and the pair traded in the 72.35-72.62 range. Spot USDINR closed at 72.62, gain of 19 ps for USD as against prior close of 72.43. RBI reference rate was fixed at 72.53 on 31/05. June USD/INR closed at 72.88, gain of 7 ps for USD as compared to prior day’s close of 72.81. June Euro/INR closed at 88.86, GBP/INR at 103.29 and Yen/INR at 66.48. USDINR fwd premia was trading at around 5.25% p.a.
|PAIRS||RBI REF RATE (31/05)|
In May till date, FII’S have net sold Rs 9341 cr in Equity segment and have net bought Rs 1805 cr of debt. In this financial year, FII’S have net bought Rs 449 Cr worth of Indian Equities and have bought Rs 704 Cr worth of Indian debt. In 2020-21 financial Year, FII’S nett bought Rs 2,74,203 Cr of Equities and have sold Rs 42820 Cr in debt.
Benchmark Nifty climbed 0.95% y’day. DOW climbed 65 points (0.19%).Nikkei declined 0.99% and Hang seng climbed 0.03%.
Euro is now at 1.2233, Pound at 1.4246, Yen at 109.38.
Commodities: Gold is now at USD 1911 and WT1Crude at USD 67.30/Brent at USD 69.84.
Interest rates: USD 10 Yr yield is at 1.58% and 3 m libor closed at 0.155%. Indian 10 yr benchmark yield closed at 6%.
Economic news: Indian GDP contracted by -7.3% for the full fiscal year 2020-21 as against expectation of -8%. Q4 GDP climbed 1.6%.Agri sector grew by 3.1% for the full year. Mfrg contracted -7.2%, construction declined 8.6% for the full year. Mfrg and construction sectors grew by 6.9% and 14.5% respectively in Q4. Services contracted by -2.3% in Q4 and by -18.2% for the full year. Household consumption fell 9.5% in 2020-21 as against 5.5% rise in 201-20. Govt expenditure rose by 2.91%.
OECD has raised Global growth forecast to 5.8% from its last update of 4.2% due to progress in vaccination and massive stimulus measures. The report highlighted the uneven nature of recovery with some countries reaching pre pandemic per capita levels within 18 months and some countries may struggle for nearly 5 years. OECD has reduced Indian growth rate to 9.9% this year.
Data highlights: – No major data release.
Tuesday’s calendar: – US ISM(mfrg) and construction spending
-EU PMI(mfrg), CPI and unemployment rate
Daily Support/Resistance table
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
Technicals: Spot closed below 50 and 200 day major moving averages. 20 day moving average is at 73.25. 50 day moving average is at 73.50.200 day moving average is at 73.59. Daily MACD is in sell zone, implying top at 75.30. Important support is at 72.25 and important resistance is at 72.75/73.20. Spot closed above its average level of the day.
Intraday supports and resistances for June contract are:
PP: 72.84, S1:72.71, S2:72.54, R1:73.01, R2: 73.14
Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.
However on directional basis, suggest the following:
Expect 72.25-72.75 trading range till either side is broken.
Imports hedging should be done on dips and exports hedging can be done later on rally.
Importers can hedge EURINR exposure now at 87.50. Receivables can be hedged at 88.90.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is above 50 and 200 day moving averages. Major resistance is at 1.2250/1.2330. Next major support is at 1.2050/1.1990. Daily MACD is in sell zone, implying an important top at 1.2250. Weekly MACD is in buy zone, implying important bottom at 1.17.
GBP/USD: The pair is above 200 day moving average. Daily MACD is in sell zone, implying important top at 1.4240 and weekly MACD is in buy zone, implying important bottom at 1.3665. Important support is at 1.40/1.38.Important resistances is at 1.4240.
USD/YEN: The pair is above 200 day major moving average. Daily MACD is in buy zone, implying important bottom at 108.35. Next important resistance is at 111. Important support is at 108.35.
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