USDINR opened at 74.98 y’day and the pair traded in the 74.94-75.20 range. Spot USDINR closed at 75.16, gain of 18 ps for USD as against prior close of 74.98. RBI reference rate was fixed at 74.98 on 03/12. Dec USD/INR closed at 75.28, gain of 7 ps for USD as compared to prior day’s close of 75.21. Dec Euro/INR closed at 85.23, GBP/INR at 99.93 and Yen/INR at 66.46. USDINR fwd premia was trading at around 4.78% p.a.  

In Dec, FII’S have net sold Rs 3078 cr in Equity segment and have net bought Rs 124 cr of debt. In this financial year, FII’S have net bought Rs 3598 Cr worth of Indian Equities and have bought Rs 20201 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 204 points (1.18%). DOW declined 59 points (0.19%). Nikkei climbed 1% and Hang seng declined 0.09% on Friday.

Euro is now at 1.1316, Pound at 1.3239, Yen at 112.82.

Commodities: Gold is now at USD 1784 and WT1Crude at USD 66/Brent at USD 70.

Interest rates: USD 10 Yr yield is at 1.356% and 3 m libor closed at 0.17%. Indian 10 yr benchmark yield closed at 6.35%.

Economic news: US non-farm payroll employment grew only 210k in November, well below expectation of 525k. So far this year, monthly job growth has averaged 555k. Overall employment remained down by -3.9m, or -2.6%, from its pre pandemic level in February 2020.Unemployment rate dropped sharply by -0.4% to 4.2%, better than expectation of 4.5%. Labor force participation rate edged up to 61.8%. Average hourly earnings rose 0.3% mom, below expectation of 0.4% mom.

US ISM and fall in unemployment rate are very reassuring, but the threat of Omicron and inflation could derail the ongoing economic recovery, more from the supply side.

Data highlights: – US ISM (services) climbed steeply to 69.1, factory orders climbed 1% m/m.

-EU PMI(services) dipped to 55.9 and retail sales climbed 0.2% m/m.

-UK PMI(services-final) was reported at 58.5.

Monday’s calendar: – EU Sentix investor confidence survey and German industrial 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 74.59. 50 day moving average is at 74.56.200 day moving average is at 73.86. Daily MACD is in buy zone, implying bottom at 73.83. Important resistance is at 75.68 and important support is at 74.85. Spot closed above its average level of the day.

Intraday supports and resistances for Dec contract are:

PP: 75.25, S1:75.14, S2:75.01, R1:75.38, R2:75.49             

Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.

However on directional basis, suggest the following:

USDINR exports hedging can be done closer to 75.50 .

Exporters can hedge EURINR receivables exposure closer to 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 1.12. Daily MACD is in buy zone, implying an important bottom at 1.1185. 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 1.3830 and weekly MACD is in sell zone, implying important top at 1.4240. Important support is at 1.3278. Important resistance is at 1.3515/1.3610.

USD/YEN: The pair is above 200 day, but below 50 day major moving averages. Daily MACD is in sell zone, implying important top at 115. Next important resistance is at 115. Important support is at 112.50

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