FX MORNING UPDATE   

                                                                                  

USDINR opened at 73.51 y’day and the pair traded in the 73.35-73.53 range. Spot USDINR closed at 73.51, gain of 2 ps USD as against prior close of 73.49. RBI reference rate was fixed at 73.43 on 16/09Sep USD/INR closed at 73.59, gain of 1 ps for USD as compared to prior day’s close of 73.58. Sep Euro/INR closed at 86.68, GBP/INR at 101.75 and Yen/INR at 67.29. USDINR fwd premia was trading at around 4.35% p.a.

PAIRS RBI REF RATE (16/09)
USDINR 73.43
EURINR 86.68
GBPINR 101.53
JPYINR 67.18

In Sept, FII’S have net bought Rs 236 cr in Equity segment and have net bought Rs 1310 cr of debt. In this financial year, FII’S have net sold Rs 2139 Cr worth of Indian Equities and have bought Rs 9175 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 0.63% y’day. DOW declined 63 points (0.16%). Nikkei was down 0.62% and Hang seng declined 1.46% y’day.

Euro is now at 1.1763, Pound at 1.3788, Yen at 109.83.

Commodities: Gold is now at USD 1757 and WT1Crude at USD 72.50/Brent at USD 75.50.

Interest rates: USD 10 Yr yield is at 1.34% and 3 m libor closed at 0.12%. Indian 10 yr benchmark yield closed at 6.16%.

Economic news: Union Cabinet approved a government guarantee of up to Rs 30,600 crore for security receipts to be issued by National Asset Reconstruction Company Ltd (NARCL). NARCL will buy non performing assets from banks. Govt is also setting up Indian debt resolution company to manage NPA’S. The government guarantee effectively offers to pay the difference between the face value and realised value of the security receipts issued by NARCL. FM said that in the last six financial years, banks have recovered Rs 5,01,479 crore. Of this Rs 3.1 lakh crore have been recovered since March 2018. 

ECB Governing Council member said while growth in Eurozone is robust, supported is still needed. The outlook is clouded by bottlenecks as well as coronavirus variants.

USD surged as retail sales climbed and fueled optimism on growth.

Data highlights: – US weekly jobless claims was reported at 332k, retail sales climbed 0.7% m/m and Phily Fed mfrg index climbed to 30.7.

Friday’s calendar: – EU CPI and UK retail sales

USD/INR      73.53 73.35
EUR/USD     1.1763 1.1821 1.1751
GBP/USD     1.3788 1.3850 1.3764
USD/JPY     109.83 109.82 109.21

Daily Support/Resistance table

Currency Pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1779 1.1807 1.1849 1.1877 1.1737 1.1709 1.1667
GBP/USD 1.3804 1.3844 1.3889 1.3929 1.3758 1.3719 1.3673
USD/JPY 109.58 109.95 110.19 110.56 109.34 108.97 108.73
USD/INR 73.46 73.57 73.64   73.39 73.28  

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency Pair Supports Resistances Trend Remarks
EURO/USD 1.1800/1.1665 1.1910/1.20 DN UP>1.19
GBP/USD 1.3725/1.36 1.39 SIDE DN<1.3725
USD/JPY 109.10/108.75 110.80/111.60 UP DN<108.70
USD/INR 73.30 73.85 DN UP>73.85
USD/CHF 0.91/0.9010 0.9240 UP DN<0.91

Technicals: Spot closed below 20, 50 and 100 day major moving averages. 20 day moving average is at 73.63. 50 day moving average is at 74.11.200 day moving average is at 73.60. Daily MACD is in sell zone, implying top at 74.85. Important resistance is at 73.64/73.85 and important support is at 73.30. Spot closed above its average level of the day.

Intraday supports and resistances for Sep contract are:

PP: 73.55, S1:73.45, S2:73.31, R1:73.69, R2:73.79              

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 at around 73.30/73.15. USD exports can be hedged at 73.70. If 73.85 is broken, hedging can be deferred.

Exporters can hedge EURINR receivables exposure at 87.25.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below 100 and 200 day moving averages, but above 50 day moving average. Major resistance is at 1.1910/1.20. Next major support is at 1.18/1.1665. Daily MACD is in buy zone, implying an important bottom at 1.1665. Weekly MACD is in sell zone, implying important top at 1.2270.

GBP/USD: The pair is above 50 and 200 day moving averages, but below 100 day moving average. Daily MACD is in buy zone, implying important bottom at 1.36 and weekly MACD is in sell zone, implying important top at 1.4240. Important support is at 1.3725 and later at 1.36.Important resistance is at 1.39.

USD/YEN: The pair is between major moving averages. Daily MACD is in sell zone, implying important top at 110.46. Next important resistance is at 110.50/110.80. Important support is at 109.10/108.70.

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