USDINR opened at 77.71 Y’day and the pair traded in the 77.71-77.81 range. Spot USDINR closed at 77.76, gain of 3 ps for USD as against prior close of 77.73. RBI reference rate was fixed at 77.78 on 09/06. June USD/INR closed at 77.88, gain of 6 ps for USD as compared to prior day’s close of 77.82. June Euro/INR closed at 83.57, GBP/INR at 97.63 and Yen/INR at 58.46. USDINR fwd premia was trading at around 3.7% p.a. FX reserves stands at USD 601.1 bn.
|PAIRS||RBI REF RATE (09/06)|
In 2022-23 fiscal, FII’S have sold 52540 Cr of Equities till date and have sold Rs 2819 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 climbed 121 points (0.74%) y’day. DOW declined 638 points. (1.94%).Nikkei climbed .04% and Hang Seng declined 0.66%.
Euro closed the week at 1.0620, Pound at 1.2494, Yen at 134.05.
Commodities: Gold is now at USD 1849 and WT1Crude at USD 120/Brent at USD 122.
Interest rates: USD 10 Yr yield is at 3.05% and 3 m libor closed at 1.57%. Indian 10 yr benchmark yield closed at 7.52%.
Economic news: ECB left interest rates unchanged as widely expected. That is, the main refinancing rate, marginal lending facility rate and deposit rate are held at 0.00%, 0.25% and -0.50% respectively. However, it explicitly said, “the Governing Council intends to raise the key ECB interest rates by 25 basis points at its July monetary policy meeting.” Besides, ECB said is expects to “raise the key ECB interest rates again in September”. The size would depend on the updated medium-term inflation outlook by then. “If the medium-term inflation outlook persists or deteriorates, a larger increment will be appropriate at the September meeting,” it added. Beyond September, “a gradual but sustained path of further increases in interest rates will be appropriate.”
In the new economic projections, annual inflation will hit 6.8% in 2022, then decline to 3.l5% in 2023. GDP growth is projected at 2.8% in 2022, 2.1% in 2023 and 2.1% in 2024 (revised down slightly for 2022 and 2023, but up for 2024).
EUR/USD rallied to 1.0770, but could not sustain. US Equities slumped on fears of high inflation.
Data highlights: – US Weekly jobless claims climbed to 229k.
Friday’s calendar : US CPI
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 77.59. 50 day moving average is at 76.82.200 day moving average is at 75.21. Daily MACD is in sell zone, implying top at 77.78. Important supports are at 77.48/77.27/77.15 and important resistance is at 77.80/78. Spot closed at its average level of the day.
Intraday supports and resistances for June contract are:
PP: 77.84, S1:77.76, S2:77.64, R1:77.96, R2:78.04.
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 77.65+ levels.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is below major moving averages. Major resistance is at 1.0750/1.0940. Next major support is at 1.0350. Daily MACD is in buy zone, implying an important bottom at 1.0350. Weekly MACD is in sell zone, implying important top at 1.1498.
GBP/USD: The pair is below 50 and 200 day moving averages. Daily MACD is in buy zone, implying important bottom at 1.2165 and weekly MACD is in sell zone, implying important top at 1.3730. Important support is at 1.2450/1.2325/1.2165. Important resistance is at 1.2660/1.28.
USD/YEN: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 126.30. Important support is at 126.30/125. Major resistance is at 131.30.
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