FX MORNING UPDATE :

USDINR opened at 74.79 y’day and the pair traded in the 74.70-74.93 range. Spot USDINR closed at 74.78, gain of 20 ps USD as against prior close of 74.98. RBI reference rate was fixed at 74.86 on 07/10Oct USD/INR closed at 74.87, loss of 30 ps for USD as compared to prior day’s close of 75.17. Oct Euro/INR closed at 86.79, GBP/INR at 101.99 and Yen/INR at 67.45. USDINR fwd premia was trading at around 4.40% p.a.  

PAIRS RBI REF RATE (07/10)
USDINR 74.86
EURINR 86.50
GBPINR 101.69
JPYINR 67.16

In Sept, FII’S have net bought Rs 7662 cr in Equity segment and have net bought Rs 11523 cr of debt. In this financial year, FII’S have net bought Rs 5287 Cr worth of Indian Equities and have bought Rs 19388 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 0.82% y’day. DOW climbed 338 points (0.98%). Nikkei was up 0.54% and Hang seng climbed 3.07% y’day.

Euro is now at 1.1557, Pound at 1.3617, Yen at 111.78.

Commodities: Gold is now at USD 1756 and WT1Crude at USD 79.20/Brent at USD 82.80.

Interest rates: USD 10 Yr yield is at 1.59% and 3 m libor closed at 0.12%. Indian 10 yr benchmark yield closed at 6.27%.

Economic news: Rupee decline paused as Crude Oil rally took a breather. RBI is expected to maintain status quo in its meeting today. US Nonfarm payrolls may trigger a deeper rally in USD, if job addition is strong.

In the accounts of ECB’s September 8-9 meeting, Governing Council members concurred with the assessment that “an accommodative monetary policy stance remained”. Also, “policy support from a sustained pace of net purchases under the PEPP, along with the other instruments and the recalibrated forward guidance, was deemed essential”.

Data highlights: – US Weekly jobless claims dipped to 326k.

-German industrial production declined -4% m/m.

Friday’s calendar: – US non farmpayrolls.

USD/INR      74.93 74.70
EUR/USD     1.1557 1.1573 1.1548
GBP/USD     1.3617 1.3637 1.3570
USD/JPY     111.78 111.68 111.24

Daily Support/Resistance table

Currency Pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1560 1.1572 1.1584 1.1596 1.1547 1.1536 1.1523
GBP/USD 1.3609 1.3648 1.3676 1.3715 1.3581 1.3542 1.3513
USD/JPY 111.53 111.82 111.97 112.27 111.38 111.09 110.94
USD/INR 74.81 74.91 75.03   74.69 74.59  

 MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency Pair Supports Resistances Trend Remarks
EURO/USD 1.1565/1.1510 1.1660/1.1765 DN UP>1.1910
GBP/USD 1.3410 1.36/1.3735 DN UP>1.39
USD/JPY 110.80/110.45 112.80 UP DN<109.10
USD/INR 74.50 75/75.16 UP DN<74.10
USD/CHF 0.9275/0.92 0.9475 UP DN<0.91

Technicals: Spot closed above 50 and 100,200 day major moving averages.20 day moving average is at 73.96. 50 day moving average is at 73.94.200 day moving average is at 73.58. Daily MACD is in buy zone, implying bottom at 72.92. Important resistance is at 75/75.16 and important support is at 74.50. Spot closed below its average level of the day.

Intraday supports and resistances for Oct contract are:

PP: 74.92 S1:74.77, S2:74.67, R1:75.02, R2:75.17              

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 73.85/73.75.

Exporters can hedge EURINR receivables exposure at 86.50.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below 50, 100 and 200 day moving averages. Major resistance is at 1.1660/1.1765. Next major support is at 1.1510. 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 below 50 and 200 day moving averages. Daily MACD is in sell zone, implying important top at 1.39 and weekly MACD is in sell zone, implying important top at 1.4240. Important support is at 1.3410.Important resistance is at 1.36/1.3735.

USD/YEN: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 109.10. Next important resistance is at 112.80. Important support is at 110.80/110.45.

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