USDINR opened at 78.97 on Friday and the pair traded in the 78.97-79.12 range. Spot USDINR closed at 79.04, gain of 7 ps for USD as against prior close of 78.97. RBI reference rate was fixed at 79.10 on 01/07. July USD/INR closed at 79.10, loss of 2 ps for USD as compared to prior day’s close of 79.12. June Euro/INR closed at 82.81, GBP/INR at 95.36 and Yen/INR at 58.63. USDINR fwd premia was trading at around 2.95% p.a.  FX reserves stands at USD 593 bn as on June 24 th.

In 2022-23 fiscal, FII’S have sold 95856 Cr of Equities till June end and have sold Rs 8299 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 18 points (0.12%) on Friday. DOW climbed 321 points (1.05%). Nikkei declined 1.73% and Hang Seng declined 0.62%.

Euro closed at 1.0429, Pound at 1.2098, Yen at 135.21.

Commodities: Gold is now at USD 1812 and WT1Crude at USD 108.45/Brent at USD 111.45.

Interest rates: USD 10 Yr yield is at 2.89% and 3 m libor closed at 2.27%. Indian 10 yr benchmark yield closed at 7.43%.

Economic news: Indian PMI was reported at 53.9, 12 th consecutive month of expansion. The output of eight core sectors grew by 18.1% in May, compared with 8.4% in the previous month. Steel sector climbed 15%,  while coal output increased 25.1%. Cement sector climbed 26.3%, electricity sector grew by 22% and fertilizer sector recorded growth of 22.8%.

Indian GST Collection is at 1.44 lac Cr in June.

The ongoing selling by FPI (Foreign Portfolio Investors) in Indian equities is turning out to be the highest selling spree since the global financial crisis 2008 and is centered around IT and financial stocks.

Govt imposed export duty of Rs 6 on Petrol and Rs 13 on diesel. Crude producing companies have to pay Rs 23620/t as windfall gains tax to Govt. Gold import duty has been hiked to 12.5%. These moves are intended to increase domestic supplies of Petrol, diesel and to lessen imports of Gold to rein in Rupee.

FM said that RBI is keeping finance ministry informed about FX movement and is taking steps to control excessive Rupee weakness.

USDINR retraced from 79.11 to below 79 levels.

EU PMI(mfrg) was finalized at 52.1 and UK PMI was finalized at 52.8. US ISM also declined steeply. Fall in US 10 Year yields and decline in PMI implies recession in coming months.

Data highlights: – US ISM(mfrg) declined to 53 and construction spending declined -0.1% m/m.

-EU CPI climbed 8.6% y/y.

Monday’s calendar :  – EU Sentix investor confidence

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 78.20. 50 day moving average is at 77.57.200 day moving average is at 75.64. Daily MACD is in buy zone. Important supports are at 78.55/78.28 and important resistance is at 79.25/79.45. Spot closed at its average level of the day.

Intraday supports and resistances for July contract are:

PP: 79.11, S1:78.95, S2:78.81, R1:79.25, R2:79.41.             

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 79+ levels. Nearby imports can be hedged at 78.55/78.30.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below major moving averages. Major resistance is at 1.0625/1.0790. Next major support is at 1.0350. Daily MACD is in sell zone, implying an important top at 1.0625. 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 1.2410 and weekly MACD is in sell zone, implying important top at 1.3730. Important support is at 1.1935. Important resistance is at 1.24/1.2660.

USD/YEN: The pair is above major moving averages. Daily MACD is in sell zone, implying important top at 137. Important support is at 131.35. Major resistance is at 137.

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