USDINR opened at 74.54 Y’day and the pair traded in the 74.44-74.62 range. Spot USDINR closed at 74.47, gain of 8 ps USD as against prior close of 74.39. RBI reference rate was fixed at 74.50 on 25/11. Nov USD/INR closed at 74.50, gain of 7 ps for USD as compared to prior day’s close of 74.43. Oct Euro/INR closed at 83.63, GBP/INR at 99.29 and Yen/INR at 64.62. USDINR fwd premia was trading at around 4.78% p.a.  

In NOV, FII’S have net sold Rs 9999 cr in Cash Equity segment and have net bought Rs 5485 cr of debt. In this financial year, FII’S have net sold Rs 14593 Cr worth of Indian Equities and have bought Rs 23057 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 88 points (-0.5%). US market was closed y’day. Nikkei was UP 0.77% and Hang seng climbed 0.20% .

Euro is now at 1.1222, Pound at 1.3310, Yen at 114.89.

Commodities: Gold is now at USD 1793 and WT1Crude at USD 77/Brent at USD 81.

Interest rates: USD 10 Yr yield is at 1.60% and 3 m libor closed at 0.17%. Indian 10 yr benchmark yield closed at 6.36%.

Economic news: USD remains the strongest one for the week on speculation that the “transitory” yet persistent strong inflation would eventually force Fed to raise interest rate earlier.

In the accounts of the ECB’s October 27-28 meeting, it’s noted, “since the monetary policy space was constrained by the effective lower bound on interest rates, the increase in the inflation rate was seen as an opportunity to re-anchor inflation expectations solidly at the Governing Council’s 2% target over the medium term.”

Also, “a continued accommodative monetary policy stance would also be in line with the Governing Council’s new monetary policy strategy, which called for policy to be persistent when interest rates were at the lower bound and explicitly allowed for inflation to moderately exceed the target for a transitory period”.

Data highlights: – No major data

Thursday’s calendar: – No major data

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 74.54. 50 day moving average is at 74.43.200 day moving average is at 73.72. Daily MACD is in sell zone, implying top at 75.68. Important resistance is at 74.58 and important support is at 73.90. Spot closed below its average level of the day.

Intraday supports and resistances for Nov contract are:

PP: 74.51, S1:74.43, S2:74.37, R1:74.57, R2:74.65             

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 .

Exporters can hedge EURINR receivables exposure at 85.50.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below 50, 100 and 200 day moving averages. Major resistance is at 1.1535. Next major support is at 1.1250. Daily MACD is in sell zone, implying an important top at 1.17. 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 1.3350 and weekly MACD is in sell zone, implying important top at 1.4240. Important support is at 1.3350. Important resistance is at 1.3650/1.3840.

USD/YEN: The pair is above major moving averages. Daily MACD is in sell zone, implying important top at 115. Next important resistance is at 115. Important support is at 112.70.

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