FX MORNING UPDATE                                                                                   

USDINR opened at 77.56 y’day and the pair traded in the 77.48-77.61 range. Spot USDINR closed at 77.58, gain of 2 ps for USD as against prior close of 77.56. RBI reference rate was fixed at 77.57 on 18/05. May USD/INR closed at 77.68, gain of 14 ps for USD as compared to prior day’s close of 77.54. May Euro/INR closed at 81.71, GBP/INR at 96.37 and Yen/INR at 60.20. USDINR fwd premia was trading at around 3.56% p.a.  FX reserves stands at USD 597.73 bn as on 29/4.

In 2022-23, FII’S have sold 19327 Cr of Equities till date and have sold Rs 3661 Cr of debt till date. In 2021-22, FII’S net sold Rs 128897 cr in Equity segment and have net bought Rs 4805 cr of 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 19 points (0.12%) y’day. DOW declined 1164 points (3.57%).Nikkei climbed 0.94% and Hang Seng climbed 0.20%.

Euro is now at 1.0490, Pound at 1.2354, Yen at 128.56.

Commodities: Gold is now at USD 1812 and WT1Crude at USD 107/Brent at USD 109.70.

Interest rates: USD 10 Yr yield is at 2.90% and 3 m libor closed at 1.40%. Indian 10 yr benchmark yield closed at 7.35%.

Economic news: ECB Governing Council member said that, “in the coming quarters, further (rate) increases could be made to reach levels in line with the natural rate of interest if the medium-term inflation outlook remains around our target.”

Euro’s rally did not pick up further steam. UK CPI accelerated sharply from 7.0% yoy to 9.0% yoy in April, but missed expectation of 9.1% yoy. 

Japanese GDP contracted -0.2% qoq in Q1, better than expectation of -0.4% qoq. In annualized term, GDP contracted -1.0%, first negative growth in two quarters, but better than expectation of -1.8%. 

Data highlights: – – US building permits climbed to 1.82 mn, housing starts dipped to 1.72 mn.

-EU CPI climbed 7.4% y/y.

-UK CPI climbed 9% y/y, RPI climbed 9.1% y/y and PPI(output) climbed 2.3% y/y

Thursday’s calendar: US Weekly jobless claims and existing home 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 76.80. 50 day moving average is at 76.41.200 day moving average is at 75. Daily MACD is in buy zone, implying bottom at 76. Important supports are at 77.38/77.15 and important resistance is at 77.80/78. Spot closed above its average level of the day.

Intraday supports and resistances for May contract are:

PP: 77.64, S1:77.56, S2:77.45, R1:77.75, R2:77.83.             

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

However on directional basis, suggest the following:

USDINR Exports can be partially hedged at 77.50+ levels.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below major moving averages. Major resistance is at 1.0640. Next major support is at 1.0350. Daily MACD is in sell zone, implying an important top at 1.1185. Weekly MACD is in sell zone, implying important top at 1.1498.

GBP/USD: The pair is below all moving averages. Daily MACD is in sell zone, implying important top at 1.33 and weekly MACD is in sell zone, implying important top at 1.3730. Important support is at 1.2030. Important resistance is at 1.2410/1.2640.

USD/YEN: The pair is above major moving averages. Daily MACD is in sell zone, implying important top at 131.30. Important support is at 127.10.

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