USDINR opened at 70.02 y’day and the pair traded in the 69.96-70.11 range. Spot USDINR closed at 70.11, gain of 30 ps ps for USD as against prior close of 69.81.RBI reference rate was fixed at 70.06. Rupee has declined 10% from its high levels of 63.25 in this calendar year. Equity markets continued to climb higher. Aug USD/INR closed at 70.135, gain of 25 ps for USD as compared to prior day’s close of 69.88. Aug Euro/INR closed at 81.23, GBP/INR at 90.41 and Yen/INR at 63.30.
FII’S have bought Rs 1504 Cr of Indian Equities in Aug till date . FII’S have bought Rs 4460 Cr of Indian debt securities in Aug till date . On a cumulative basis, FII’S have bought Rupees 3534 Cr of Indian Equities till date for this calendar year and have sold Rupees 36679 Cr of Indian debt in this calendar year till date.
Benchmark Nifty climbed 0.10% y’day. DOW declined 76 points (0.30%) y’day. Nikkei climbed 0.22% and Hang seng declined 0.49 % y’day.
Euro is now at 1.1546, Pound at 1.2809,Yen at 111.39.
Commodities: Gold is now at USD 1193 and WT1Crude at USD 68.10.
Interest rates: USD 10 Yr yield is at 2.82% and 3 m libor closed at 2.36%. Indian 10 yr benchmark yield closed at 7.88%.
Economic news: ECB’s monetary policy meeting minutes noted that “members considered that the risks surrounding the euro area growth outlook could still be assessed as broadly balanced”. Though, there are uncertainties related to global factors “notably the threat of protectionism.”. Also, “risk of persistent heightened financial market volatility also continued to warrant monitoring.”Bundesbank President Jens Weidmann warned today that ECB must not delay monetary policy normalization.
EU PMI(mfrg) data has flashed warning signs of manufacturing slowdown due to trade protectionism. EU’s market survey economist added that “warning lights on growth are flashing” as “risks seem tilted to the downside”. He noted “escalating political worries, rising prices and a recent slowdown in order book growth have all contributed to the gloomiest outlook for almost two year”. And, “with manufacturing looking the most susceptible to a trade-led slowdown in coming months, hopes are pinned on a robust service sector helping to drive economic growth as we move into the autumn, yet even here optimism is down to its lowest for nearly two years.”
Data Highlights : – – US weekly jobless claims declined to 210k, new home sales dipped to 627k and house price index climbed 0.2% m/m.
-EU PMI(flash-mfrg) dipped to 54.6, PMI(services) was in line with expectation at 54.4 and consumer confidence was reported at -2.
Friday’s calendar: -US durables order
Daily Support/Resistance table
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
Technicals: Spot closed above 100 and 200 day major moving averages. 20 day moving is at 69. 50 day moving average is at 68.63. 200 day moving average is at 65.90. Daily MACD is in buy zone, implying bottom at 68.30 . Important support zone is at 69.60 and later at 69.30. Important resistance is at 70.40. Spot closed above its average level of the day.
Intra day supports and resistances for Aug contract are:
PP: 70.11,S1:70.02, S2:69.91, R1:70.22, R2:70.31.
Hedging strategy for USD/INR: Hedging decisions be taken according to comfort and accounting rates.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is below 100 and 200 day major moving averages. Next Major resistance is at 1.1510 and later at 1.1620. Major support is at 1.13. Daily MACD is in sell zone, implying an important top at 1.1850. Weekly MACD is in sell zone, implying important top at 1.2560.
GBP/USD: Trend is bearish in daily chart. Daily MACD is in sell zone, implying important top at 1.3215 and weekly MACD is in sell zone, implying important top at 1.4375. The pair is trading below all major moving averages. Important resistance is at 1.2957 and later at 1.3050. Important support is at 1.26.
USD/YEN: The pair is above major moving averages. Daily MACD is in sell zone, implying important top at 113. Next important support is at 110.20 and later at 109.20. Important resistance is 113.