FX MORNING UPDATE                           

USDINR opened at 75.30 on Friday and the pair traded in the 75.18-75.47 range. Spot USDINR closed at 75.29, loss of 36 ps for USD as against prior close of 75.65. RBI reference rate was fixed at 75.28 on 25/02Mar USD/INR closed at 75.58, loss of 43 ps for USD as compared to prior day’s close of 76.01. Mar Euro/INR closed at 84.59, GBP/INR at 101.15 and Yen/INR at 65.49. USDINR fwd premia was trading at around 4.10% p.a.  

PAIRS RBI REF RATE (25/02)
USDINR 75.28
EURINR 84.37
GBPINR 101.02
JPYINR 65.32

In Feb, FII’S have net sold Rs 25270 cr in Equity segment and have net sold Rs 2054 cr of debt. In this financial year, FII’S have net sold Rs 57891 Cr worth of Indian Equities and have bought Rs 4454 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 climbed 410 points (2.53%). DOW climbed 834 points (2.51%). Nikkei climbed 1.95% and Hang Seng declined -0.59% y’day.

Euro is now at 1.1268, Pound at 1.3414, Yen at 115.54.

Commodities: Gold is now at USD 1890 and WT1Crude at USD 91.90/Brent at USD 94.50.

Interest rates: USD 10 Yr yield is at 1.97% and 3 m libor closed at 0.29%. Indian 10 yr benchmark yield closed at 6.75%.

Economic newsRupee recovered to 75.29 from prior day’s steep losses as markets digested Ukraine developments. RBI seems to have sold USD above 75.30. Equity markets also recovered. Q3 GDP is due for release.

US headline PCE price index accelerated from 5.8% yoy to 6.1% yoy, above expectation of 5.5% yoy. Core PCE price index rose from 4.8% yoy to 5.2% yoy, above expectation of 5.1% yoy.

Data highlights: – US durables order climbed 1.6% m/m, pending home sales declined -5.7% m/m, Personal income was flat m/m and spending climbed 2.1% m/m.

Monday’s calendar: No major data release

USD/INR      75.47 75.18
EUR/USD      1.1268 1.1275 1.1165
GBP/USD      1.3414 1.3441 1.3365
USD/JPY      115.54 115.78 115.14

Daily Support/Resistance table

Currency Pairs Pivot R1 R2 R3 S1 S2 S3
EURO/USD 1.1236 1.1307 1.1378    1.1197 1.1126  
GBP/USD 1.3406 1.3447 1.3483 1.3372 1.3330  
USD/JPY 115.48 115.83  116.12    115.18 114.84  
USD/INR 75.31 75.45 75.61   75.15 75.01  

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency Pair Supports Resistances Trend Remarks
EURO/USD 1.11 1.1280/1.14/1.1485 DN UP>1.15
GBP/USD 1.3275 1.3485/1.3650 DN UP>1.3630
USD/JPY 114.40 116.30 UP DN<114.40
USD/INR 74.95 75.70 UP DN<74.95
USD/CHF 0.9175/0.9085 0.9345 SIDE DN<0.9085

Technicals: Spot closed above 200 day major moving averages.20 day moving average is at 74.97. 50 day moving average is at 74.81.200 day moving average is at 74.32. Daily MACD is in buy zone, implying bottom at 74.35. Important resistance is at 75.70 and important support is at 74.95. Spot closed below its average level of the day.

Intraday supports and resistances for Mar contract are:

PP: 75.62, S1:75.37, S2:75.16, R1:75.83, R2:76.08.             

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 major 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 buy zone, implying important bottom at 1.1120.

GBP/USD: The pair is below all moving averages. Daily MACD is in sell zone, implying important top at 1.3650 and weekly MACD is in buy zone, implying important bottom at 1.3170. Important support is at 1.3275/1.3170. Important resistance is at 1.3485/1.3650

USD/YEN: The pair is above all major moving averages. Daily MACD is in buy zone, implying important bottom at 114.40. Next important resistance is at 116.35. Important support is at 114.40/113.50

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