USDINR opened at 74.87 Y’day and the pair traded in the 74.75-74.92 range. Spot USDINR closed at 74.86, gain of 2 ps for USD as against prior close of 74.84. RBI reference rate was fixed at 74.86 on 03/02. Feb USD/INR closed at 75.06, gain of 10 ps for USD as compared to prior day’s close of 74.96. Feb Euro/INR closed at 84.68, GBP/INR at 101.69 and Yen/INR at 65.37. USDINR fwd premia was trading at around 4.45% p.a.
|PAIRS||RBI REF RATE (03/02)|
In Jan, FII’S have net sold Rs 27506 cr in Equity segment and have net bought Rs 3615 cr of debt. In this financial year, FII’S have net sold Rs 32722 Cr worth of Indian Equities and have bought Rs 6508 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 219 points (-1.24%). DOW declined 518 points (-1.45%). Nikkei declined 1.06% and Hang Seng climbed 1.07% y’day.
Euro closed at 1.1458, Pound at 1.3609, Yen at 114.94.
Commodities: Gold is now at USD 1806 and WT1Crude at USD 90/Brent at USD 91.60.
Interest rates: USD 10 Yr yield is at 1.766% and 3 m libor closed at 0.27%. Indian 10 yr benchmark yield closed at 6.90%.
Economic news: BoE raised Bank Rate by 0.25% to 0.50% , by a slight majority of 5-4 vote. Going forward, the extent of any further tightening in monetary policy will “depend on the medium-term prospects for inflation”. If the economy develops broadly in line with the February Report central projections, “some further modest tightening in monetary policy is likely to be appropriate in the coming months.”
ECB kept interest rates unchanged. The main refinancing rate, marginal lending facility rate and deposit facility rate are held at 0.00%, 0.25%, and -0.50% respectively.
It maintains the forward guidance that interest rates will “remain at their present or lower levels” until ECB sees inflation “reaching 2% well ahead of the end of tis projection horizon and durably for the rest of the projection horizon”.
ECB President Christine Lagarde admitted in the post-meeting press conference that inflation surprises caused unanimous concerns in the Governing Council.
Euro surged past 1.1375, as ECB Chief’s comments implied that forward guidance could be changed in coming months.
US and Global Equities declined steeply on disappointing results from Facebook. While Amazon, Microsoft and Apple have delivered better results, Netflix and Facebbok have delivered below expectation. Hawkish comments from ECB and BOE’S tightening of rates have also contributed to market volatility. Focus is on US employment data.
Data highlights: -US Weekly jobless claims dipped to 238k, ISM(services) climbed to 59.9 and factory orders declined -0.4% m/m.
-EU PMI(services-final) was reported at 51.1, PPI climbed 2.9% m/m.
-UK PMI(services-final) climbed to 54.1.
Friday’s calendar: – US non farm payrolls
-EU retail sales
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 74.47. 50 day moving average is at 74.92.200 day moving average is at 74.10. Daily MACD is in buy zone, implying bottom at 73.80. Important resistance is at 75.05/75.35 and important support is at 74.40. Spot closed above its average level of the day.
Intraday supports and resistances for Feb contract are:
PP: 75, S1:74.80, S2:74.65, R1:75.15, R2:75.35.
Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.
However on directional basis, suggest the following:
USDINR exports can be hedged at 75.50 +.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is below all major moving averages. Major resistance is at 1.1485. Next major support is at 1.11.. Daily MACD is in sell zone, implying an important top at 1.1485. 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 sell zone, implying important bottom at 1.3170 and weekly MACD is in sell zone, implying important top at 1.3750. Important support is at 1.3170. Important resistance is at 1.3750/1.3850.
USD/YEN: The pair is above 100 and 200 day major moving averages., but below 20 and 50 day moving averages. 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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