USDINR opened at 75.43 y’day and the pair traded in the 75.16-75.68 range. Spot USDINR closed at 75.52, gain of 17 ps USD as against prior close of 75.35. RBI reference rate was fixed at 75.34 on 12/10. Oct USD/INR closed at 75.60, gain of 11 ps for USD as compared to prior day’s close of 75.49. Oct Euro/INR closed at 87.37, GBP/INR at 102.94 and Yen/INR at 66.75. USDINR fwd premia was trading at around 4.40% p.a.  

In Oct, FII’S have net bought Rs 3522 cr in Equity segment and have net bought Rs 57 cr of debt. In this financial year, FII’S have net bought Rs 8809 Cr worth of Indian Equities and have bought Rs 19445 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 0.26% y’day. DOW declined 117 points (0.34%). Nikkei was down 0.94% and Hang seng declined 1.43% y’day.

Euro is now at 1.1545, Pound at 1.3601, Yen at 113.44.

Commodities: Gold is now at USD 1761 and WT1Crude at USD 80.40/Brent at USD 83.60.

Interest rates: USD 10 Yr yield is at 1.57% and 3 m libor closed at 0.12%. Indian 10 yr benchmark yield closed at 6.33%.

Economic news: CPI inflation eased to 4.35%. Food price inflation eased to 0.68%. IIP climbed 11.9% in Aug. Mfrg grew by 9.7%. Capital goods sector climbed 19.9%.

IMF lowered 2021 growth forecast slightly by -0.1% to 5.9% , reflecting “a downgrade for advanced economies—in part due to supply disruptions—and for low-income developing countries, largely due to worsening pandemic dynamics.” Indian growth is expected to be 9.5%.

Data highlights: – German and EU Zew surveys declined to 22.3 and 21 respectively.

-UK claimant count change was reported at -51.1 k and unemployment rate was flat at 4.5%.

Wednesday’s calendar: – US CPI and FOMC minutes

-UK GDP, Industrial and manufacturing production

Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above 50 and 100,200 day major moving averages.20 day moving average is at 74.20. 50 day moving average is at 74.02.200 day moving average is at 73.60. Daily MACD is in buy zone, implying bottom at 72.92. Important resistance is at 75.80/76 and important support is at 75.16/75.05. Spot closed above its average level of the day.

Intraday supports and resistances for Oct contract are:

PP: 75.55 S1:75.32, S2:75.04, R1:75.83, R2:76.06              

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 74.50. Exports can be hedged at 75.50.

Exporters can hedge EURINR receivables exposure at 87.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below 50, 100 and 200 day moving averages. Major resistance is at 1.1640/1.1750. Next major support is at 1.1530/1.1480. 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 buy zone, implying important bottom at 1.3410 and weekly MACD is in sell zone, implying important top at 1.4240. Important support is at 1.3410.Important resistance is at 1.3650/1.3735.

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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