FX MORNING UPDATE     

USDINR opened at 75.10 y’day and the pair traded in the 74.82-75.13 range. Spot USDINR closed at 74.87, loss of 48 ps USD as against prior close of 75.35. RBI reference rate was fixed at 75.05 on 20/10Oct USD/INR closed at 74.97, loss of 38 ps for USD as compared to prior day’s close of 75.35. Oct Euro/INR closed at 87.20, GBP/INR at 103.08 and Yen/INR at 65.55. USDINR fwd premia was trading at around 4.42% p.a.  

PAIRS RBI REF RATE (21/10)
USDINR 75.05
EURINR 87.36
GBPINR 103.46
JPYINR 65.55

In Oct, FII’S have net bought Rs 962 cr in Equity segment and have net sold Rs 2051 cr of debt. In this financial year, FII’S have net bought Rs 6249 Cr worth of Indian Equities and have bought Rs 17337 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 declined 0.83% y’day. DOW climbed 152 points (0.43%). Nikkei was up 0.14% and Hang seng climbed 1.35% y’day.

Euro is now at 1.1655, Pound at 1.3827, Yen at 114.36.

Commodities: Gold is now at USD 1783 and WT1Crude at USD 83.77/Brent at USD 86.

Interest rates: USD 10 Yr yield is at 1.67% and 3 m libor closed at 0.12%. Indian 10 yr benchmark yield closed at 6.37%.

Economic news: Rupee gained 48 ps on strong bond related inflows. Global Yields spiked higher. Indian 10 Year yield climbed to 6.39%.

Data highlights: – EU CPI was finalized at 3.4% y/y.

-UK CPI climbed 3.1% y/y, RPI climbed 4.9% y/y, PPI(output) climbed 0.5% m/m.

Thursday’s calendar: – US Weekly jobless claims, Phily Fed mfrg index, existing home sales

-EU Consumer confidence

USD/INR      75.13 74.82
EUR/USD     1.1655 1.1659 1.1616
GBP/USD     1.3827 ` 1.3835 1.3742
USD/JPY     114.36 114.71 114.08

Daily Support/Resistance table

Currency Pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1643 1.1670 1.1686 1.1712 1.1627 1.1600 1.1584
GBP/USD 1.3800 1.3858 1.3893 1.3951 1.3765 1.3707 1.3673
USD/JPY 114.39 114.70 115.01 115.32 114.07 113.77 113.45
USD/INR 74.94 75.06 75.25   74.75 74.63

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency Pair Supports Resistances Trend Remarks
EURO/USD 1.1525/1.1475 1.1640/1.1710 DN UP>1.1910
GBP/USD 1.3655/1.3410 1.3810 SIDE UP>1.39
USD/JPY 112.10 115 UP SIDE<112.10
USD/INR 74.65 75..05/75.16/75.67 UP DN<74.65
USD/CHF 0.9150 0.9370 UP DN<0.91

Technicals: Spot closed above 50 and 100,200 day major moving averages.20 day moving average is at 74.52. 50 day moving average is at 74.10.200 day moving average is at 73.64. Daily MACD is in buy zone, implying bottom at 72.92. Important resistance is at 75.67/76 and important support is at 74.65. Spot closed below its average level of the day.

Intraday supports and resistances for Oct contract are:

PP: 75.03 S1:74.80, S2:74.64, R1:75.19, R2:75.42              

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 74.70. Exports can be hedged at 75.50.

Exporters can hedge EURINR receivables exposure at 87.25+.

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 buy zone, implying an important bottom at 1.1525. Weekly MACD is in sell zone, implying important top at 1.2270.

GBP/USD: The pair is above 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 1.3650/1.3410. Important resistance is at 1.3840.

USD/YEN: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 109.10. Next important support is at 115. Important support is at 112.10

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