FX MORNING UPDATE  

USDINR opened at 79.23 y’day and the pair traded in the 79.23-79.38 range. Spot USDINR closed at 79.30, loss of 7 ps for USD as against prior close of 79.37. RBI reference rate was fixed at 79.33 on 06/07July USD/INR closed at 79.24, loss of 26 ps for USD as compared to prior day’s close of 79.50. June Euro/INR closed at 80.96, GBP/INR at 94.43 and Yen/INR at 58.65. USDINR fwd premia was trading at around 2.95% p.a.  FX reserves stands at USD 593 bn as on June 24 th.

PAIRSRBI REF RATE (06/07)
USDINR79.33
EURINR81.37
GBPINR94.69
JPYINR58.61

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 climbed 178 points (1.13%) y’day. DOW climbed 69 points (0.23%). Nikkei declined 1.15% and Hang Seng declined 1.22%.

Euro closed at 1.0187, Pound at 1.1923, Yen at 135.66.

Commodities: Gold is now at USD 1739 and WT1Crude at USD 97/Brent at USD 99.

Interest rates: USD 10 Yr yield is at 2.90% and 3 m libor closed at 2.27%. Indian 10 yr benchmark yield closed at 7.30%.

Economic news: RBI has announced major measures to encourage Foreign Currency inflows. They include : 1) Exempting FCNR (B) and NRE deposits from CRR, 2) Allow FPI’S to invest in new G-SEC’S of 7 and 14 Year tenor, 3) Increase in limit of ECB under automatic route to 1.5 bn USD from USD 750 mn and the spread by another 100 bps, 4) FPI’S can invest more than 30% investments in residual maturity of less than 1 Year in Corporate bonds and G-SEC’S till Oct 31st, 5) Banks can lend their overseas foreign currency borrowing to entities under wider set of end use purposes, which hitherto is restricted to export finance.

Rupee retraced from 79.37 to 79.05.

Fed minutes were a firm restatement of the Fed’s intent to get prices under control to address stubborn inflation and concern about lost faith in the central bank’s power.

Euro declined further due to stagflation risks, Gas crisis and prolonged Russia- Ukraine war and its economic impact. Oil prices declined to 3 month lows on recessionary fears.

Data highlights: – US ISM (non mfrg) climbed to 55.3.

–EU retail sales climbed 0.2% m/m and German factory orders climbed 0.1% m/m.

-UK PMI(construction) dipped to 52.6.

Thursday’s calendar :  US Weekly jobless claims and ADP report

-German industrial production.

USD/INR   79.3779.23
EUR/USD      1.01871.02741.0162
GBP/USD      1.19231.19891.1876
USD/JPY      135.66136.12134.96

Daily Support/Resistance table

Currency PairsPivotR1R2R3S1S2S3
EURO/USD1.02071.02521.03191.03641.01401.00951.0028
GBP/USD1.19291.19821.20411.20941.18691.18171.1757
USD/JPY135.68136.40136.84137.56135.24134.52134.07
USD/INR79.3079.3779.45 79.2279.15 

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency PairSupportsResistancesTrendRemarks
EURO/USD1.03501.0625/1.0790DNUP>1.0790
GBP/USD1.19351.24/1.2660DNSIDE>1.2410
USD/JPY131.35/126.35137UPSIDE<131.35
USD/INR78.80/78.4579.45/80UPSIDE<78.80
USD/CHF0.94600.9725DNUP>0.9725

Technicals: Spot closed above 200 day major moving averages.20 day moving average is at 78.43. 50 day moving average is at 77.73.200 day moving average is at 75.64. Daily MACD is in buy zone. Important supports are at 78.80/78.45 and important resistance is at 79.45. Spot closed at its average level of the day.

Intraday supports and resistances for July contract are:

PP: 79.27, S1:79.02, S2:78.82, R1:79.48, R2:79.72.             

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 79.15+ levels. Nearby imports can be hedged at 78.85/78.45.

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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