USDINR opened at 74.38 Y’day and the pair traded in the 74.37-74.60 range. Spot USDINR closed at 74.58, gain of 34 ps for USD as against prior close of 74.24. RBI reference rate was fixed at 74.41 on 18/01. Jan USD/INR closed at 74.67, gain of 33 ps for USD as compared to prior day’s close of 74.34. Jan Euro/INR closed at 85.05, GBP/INR at 101.64 and Yen/INR at 65.11. USDINR fwd premia was trading at around 4.75% p.a. FX reserves stands at USD 633 bn.
|PAIRS||RBI REF RATE (18/01)|
In Jan, FII’S have net bought Rs 2593 cr in Equity segment and have net bought Rs 255 cr of debt. In this financial year, FII’S have net sold Rs 245 Cr worth of Indian Equities and have bought Rs 3148 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 195 points (-1.07%). DOW declined 543 points (-1.51%). Nikkei climbed 0.74% and Hang seng declined 0.68% .
Euro closed at 1.1418, Pound at 1.3657, Yen at 114.52.
Commodities: Gold is now at USD 1812 and WT1Crude at USD 86.25/Brent at USD 88.80.
Interest rates: USD 10 Yr yield is at 1.88% and 3 m libor closed at 0.22%. Indian 10 yr benchmark yield closed at 6.63%.
Economic news: Rupee declined to 74.60. 10 Year yield climbed further to 6.65%. Equity indices declined steeply during closing hour. Steep rise in Oil prices weighed down on Rupee. US Yields rose sharply and dragged Equity markets lower.
EU economic confidence has improves significantly as vindicated by Zew survey. ZEW President Achim Wambach said: “The economic outlook has improved considerably with the start of the new year. The majority of financial market experts assume that economic growth will pick up in the coming six months. It is likely that the phase of economic weakness from the fourth quarter of 2021 will soon be overcome.
BoJ left monetary policy unchanged. Under the yield curve control, short-term policy interest rate is held unchanged at -0.1%. BoJ will also buy a “necessary amount” of JGB bonds to keep 10-year yield at around 0%.
Data highlights: – EU and German Zew survey climbed steeply to 49.4 and 51.7 respectively.
-UK unemployment rate declined to 4.1% and claimant count change increased to -43.3k.
Wednesday’s calendar: – US Building permits and housing starts
-UK CPI, RPI and PPI(output)
Daily Support/Resistance table
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
Technicals: Spot closed above 200 day major moving averages.20 day moving average is at 74.58. 50 day moving average is at 74.83.200 day moving average is at 74.10. Daily MACD is in buy zone, implying bottom at 73.80. Important resistance is at 74.60/74.95 and important support is at 74.10/73.85. Spot closed above its average level of the day.
Intraday supports and resistances for Jan contract are:
PP: 74.34, S1:74.23, S2:74.11, R1:74.46, R2:74.57.
Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.
However on directional basis, suggest the following:
USDINR imports can be hedged.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is below 100 and 200 day moving averages, but above 20 and 50 day averages. Major resistance is at 1.1525. Next major support is at 1.1365 and later at 1.1280/1.12. 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 above 50 ,but below 200 day moving averages. Daily MACD is in buy zone, implying important bottom at 1.3170 and weekly MACD is in sell zone, implying important top at 1.4240. Important support is at 1.34. Important resistance is at 1.3750/1.3850.
USD/YEN: The pair is above 100 and 200 day major moving averages., but below 20 day moving average. Daily MACD is in sell zone, implying important top at 116.35. Next important resistance is at 116.35. Important support is at 112.50
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