FX MORNING UPDATE :

USDINR opened at 74.24 y’day and the pair traded in the 74.21-74.35 range. Spot USDINR closed at 74.35, loss of 10 ps USD as against prior close of 74.25. RBI reference rate was fixed at 74.28 on 17/08Aug USD/INR closed at 74.44, gain of 6 ps for USD as compared to prior day’s close of 74.38. Aug Euro/INR closed at 87.64, GBP/INR at 102.67 and Yen/INR at 68.12. USDINR fwd premia was trading at around 4.25% p.a.

PAIRS RBI REF RATE (17/08)
USDINR 74.28
EURINR 87.40
GBPINR 102.61
JPYINR 67.95

In August, till date,, FII’S have net bought Rs 4353 cr in Equity segment and have net bought Rs 78 cr of debt. In this financial year, FII’S have net sold Rs 2662 Cr worth of Indian Equities and have sold Rs 4809 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 0.31% Y’day. DOW declined 282 points (0.79%).Nikkei was down 0.36% and Hang seng declined 1.66% Y’day.

Euro is now at 1.1714, Pound at 1.3746, Yen at 109.53.

Commodities: Gold is now at USD 1789 and WT1Crude at USD 66.55/Brent at USD 69.10.

Interest rates: USD 10 Yr yield is at 1.26% and 3 m libor closed at 0.12%. Indian 10 yr benchmark yield closed at 6.23%.

Economic news: US retail sales dropped -1.1% mom in July to USD 61.7B, worse than expectation of -0.2% mom. Ex-auto sales dropped -0.4% mom, below expectation of 0.1% mom. Eurozone GDP grew 2.0% qoq in Q2,

Fed Chairman Powell reiterated that the recovery in the labor market is far from complete and said that it wasn’t clear how a big an impact the Delta variant will have on the economy.

Data highlights: – US retail sales declined -1.1% m/m, industrial production climbed 0.9% m/m.

-EU GDP (flash) climbed 2% q/q.

-UK Claimant count change is at -7.8k and unemployment rate was reported at 4.7%.

Wednesday’s calendar: -US building permits, housing starts

-EU CPI(final)

-UK CPI

USD/INR      74.35 74.21
EUR/USD     1.1714 1.1785 1.1702
GBP/USD     1.3746 1.3841 1.3727
USD/JPY     109.53 109.65 109.13

Daily Support/Resistance table

Currency Pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1732 1.1762 1.1815 1.1845 1.1679 1.1649 1.1596
GBP/USD 1.3769 1.3811 1.3883 1.3926 1.3697 1.3655 1.3583
USD/JPY 109.44 109.75 109.97 110.28 109.23 108.91 108.70
USD/INR 74.30 74.40 74.44   74.25 74.16  

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency Pair Supports Resistances Trend Remarks
EURO/USD 1.1700 1.1900 DN UP>1.1900
GBP/USD 1.3790 1.40 UP DN<1.3790
USD/JPY 108.75 110.80/111.60 UP DN<108.70
USD/INR 74.08/73.90 74.50 UP SIDE<74.24
USD/CHF 0.9010 0.9275 UP DN<0.9010

Technicals: Spot closed above all major moving averages. 20 day moving average is at 74.37. 50 day moving average is at 74.18.200 day moving average is at 73.63. Daily MACD is in buy zone, implying bottom at 74.08. Important support is at 74.08 and important resistance is at 74.50. Spot closed above its average level of the day.

Intraday supports and resistances for Aug contract are:

PP: 74.41, S1:74.32, S2:74.20, R1:74.53, R2:74.62                 

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

However on directional basis, suggest the following:

USDINR Imports hedging can be done . USD exports can be hedged on rally to 74.60.

Exporters can hedge EURINR receivables exposure at 88.10.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below 50 and 200 day moving averages. Major resistance is at 1.19. Next major support is at 1.17. Daily MACD is in sell zone, implying an important top at 1.19. 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 sell zone, implying important top at 1.3985 and weekly MACD is in sell zone, implying important top at 1.4240. Important support is at 1.3790/1.3570.Important resistance is at 1.40.

USD/YEN: The pair is above 200 day major moving average. Daily MACD is in buy zone, implying important bottom at 108.70. Next important resistance is at 110.80/111.60. Important support is at 108.70.

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