USDINR opened at 74.15 y’day and the pair traded in the 74.08-74.24 range. Spot USDINR closed at 74.19, loss of 9 ps for USD as against prior close of 74.28. RBI reference rate was fixed at 74.15 on 04/08. Aug USD/INR closed at 74.34, loss of 10 ps for USD as compared to prior day’s close of 74.44. Aug Euro/INR closed at 88.23, GBP/INR at 103.55 and Yen/INR at 68.12. USDINR fwd premia was trading at around 4.30% p.a. Rupee gained to 74.08 and then declined as Euro softened against USD. IPO related flows are expected to contribute to Rupee gains.
|PAIRS||RBI REF RATE (04/08)|
In July, FII’S have net sold Rs 10188 cr in Equity segment and have net sold Rs 758 cr of debt. In this financial year, FII’S have net sold Rs 1137 Cr worth of Indian Equities and have sold Rs 4893 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 0.79% y’day. DOW declined 323 points (0.92%).Nikkei was down 0.21% and Hang seng climbed 0.88% y’day.
Euro is now at 1.1836, Pound at 1.3890, Yen at 109.66.
Commodities: Gold is now at USD 1814 and WT1Crude at USD 68.35/Brent at USD 70.56.
Interest rates: USD 10 Yr yield is at 1.19% and 3 m libor closed at 0.13%. Indian 10 yr benchmark yield closed at 6.20%.
Economic news: Indian PMI(services) declined to 45.4 in July. Indian Trade deficit rose to USD 11.2 bn in July. Exports climbed 47.91% y/y to USD 35.2 bn and Imports climbed 59.4% y/y to USD 46.4 bn.
Indian Equity indices continued to rally to new highs. RBI meeting and US unemployment data are the key focus events for the week.
Data highlights: – US ADP employment report was below consensus at 330k. This is against expectation of 680k. ISM(non mfrg) beat expectation to climb to 64.1.
-EU PMI(services) declined to 59.8 and retail sales climbed 1.5% m/m.
-UK PMI(services) was better than expected at 59.6.
Thursday’s calendar: – US Weekly jobless claims and German factory orders
Daily Support/Resistance table
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
Technicals: Spot closed above all major moving averages. 20 day moving average is at 74.50. 50 day moving average is at 73.93.200 day moving average is at 73.58. Daily MACD is in sell zone, implying top at 74.95. Important support is at 74.05/73.90 and important resistance is at 74.32/74.40/74.55. Spot closed above its average level of the day.
Intraday supports and resistances for Aug contract are:
PP: 74.34, S1:74.25, S2:74.17, R1:74.42, R2:74.51
Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.
However on directional basis, suggest the following:
USDINR Imports hedging should be done on dips to 73.90 . USD exports can be hedged.
Exporters can hedge EURINR receivables exposure at 88.30.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is below 50 and 200 day moving averages. Major resistance is at 1.1975. Next major support is at 1.1815/1.1755. Daily MACD is in buy zone, implying an important bottom at 1.1755. Weekly MACD is in sell zone, implying important top at 1.2270.
GBP/USD: The pair is above 200 day moving average. Daily MACD is in buy zone, implying important bottom at 1.3570 and weekly MACD is in sell zone, implying important top at 1.4240. Important support is at 1.3740/1.3570.Important resistance is at 1.4010.
USD/YEN: The pair is above 200 day major moving average. Daily MACD is in sell zone, implying important top at 110.60. Next important resistance is at 110.60/111.60. Important support is at 109.
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