USDINR opened at 78.03 y’day and the pair traded in the 78-78.10 range. Spot USDINR closed at 78.07, unchanged for USD as against prior close of 78. RBI reference rate was fixed at 78.08 on 16/06. June USD/INR closed at 78.14, loss of 11 ps for USD as compared to prior day’s close of 78.25. June Euro/INR closed at 81.50, GBP/INR at 94.65 and Yen/INR at 58.88. USDINR fwd premia was trading at around 3.30% p.a.  FX reserves stands at USD 601.1 bn.

In 2022-23 fiscal, FII’S have sold 59281 Cr of Equities till date and have sold Rs 7298 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 331 points (2.11%) y’day. DOW declined 741 points. (2.42%).Nikkei climbed 0.40% and Hang Seng declined 2.17%.

Euro is now at 1.0537, Pound at 1.2325, Yen at 133.12.

Commodities: Gold is now at USD 1849 and WT1Crude at USD 116/Brent at USD 119.

Interest rates: USD 10 Yr yield is at 3.34% and 3 m libor closed at 2.02%. Indian 10 yr benchmark yield closed at 7.60%.

Economic news: US FOMC hiked rate by 75 bps to 1.5-1.75%. Growth projection has been lowered to 1.7%. Fed rate is expected to climb to 3.4% by Dec 2022 and 3.8% by Dec 23. Fed has reworded its statement on inflation, mentioning that it is committed to bring inflation down to 2%.

BoE raised Bank Rate by 25bps to 1.25%. The decision was not unanimous, with three members voting for a 50bps hike. The MPC said it will take necessary actions to return inflation to 2% target. The scale, pace and timing of further rate hikes will reflect the assessment of economic outlook and inflation pressures.Nevertheless, it emphasized, “the Committee will be particularly alert to indications of more persistent inflationary pressures, and will if necessary act forcefully in response.” BOE mentioned that CPI is expected to be over 9% “during the next few months” and rise to “slightly above 11% in October.

SNB (Swiss National Bank) raised rates by 50 bps to counter inflationary pressures.

Data highlights: – US Weekly jobless claims climbed to 229k, housing starts dipped to 1.55mn, building permits declined to 1.7 mn and Phily Fed index dipped to -3.3.

Friday’s calendar :  US industrial production

-EU 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 77.70. 50 day moving average is at 77.02.200 day moving average is at 75.30. Daily MACD is in buy zone. Important supports are at 77.80 and important resistance is at 78.25. Spot closed above its average level of the day.

Intraday supports and resistances for June contract are:

PP: 78.14, S1:78.04, S2:77.95, R1:78.23, R2:78.33.             

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 78.25+ levels. Nearby imports can be hedged at 77.80.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below major moving averages. Major resistance is at 1.0790. Next major support is at 1.0350. Daily MACD is in sell zone, implying an important top at 1.0790. 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 sell zone, implying important top at 1.2660 and weekly MACD is in sell zone, implying important top at 1.3730. Important support is at 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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