USDINR opened at 78.67 y’day and the pair traded in the 78.67-79.19 range. Spot USDINR closed at 79.16, gain of 45 ps for USD as against prior close of 78.71. 

RBI reference rate was fixed at 78.84 on 03/08. Aug USD/INR closed at 79.35, gain of 53 ps for USD as compared to prior day’s close of 78.82. Aug Euro/INR closed at 81.10, GBP/INR at 96.86 and Yen/INR at 59.67. USDINR fwd premia was trading at around 3.08% p.a.  FX reserves stands at USD 571 bn as on July 29 th.

In July till date FII’S have net sold Rs 1200 Cr of Equities in Cash segment and have sold Rs 1130 Cr of debt till date. In this Calendar Year, FII’S have sold close to Rs 2.02 lac Cr worth of Equities. 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 42 y’day (0.27%) y’day. DOW climbed 416 points (1.29%). Nikkei climbed 0.53% and Hang Seng climbed 0.40%.

Euro is now at 1.0169, Pound at 1.2167, Yen at 133.49.

Commodities: Gold is now at USD 1785 and WT1Crude at USD 91/Brent at USD 97.

Interest rates: USD 10 Yr yield is at 2.70% and 3 m libor closed at 2.73%. Indian 10 yr benchmark yield closed at 7.22%.

Economic news: Indian trade deficit expanded to USD 31 bn in July, due to flattish exports and steep climb in imports. Exports was at 35.24 bn, almost same as July 2021. This is due to curb in exports of petroleum , steel and Wheat. Imports surged 43.5% to USD 66.25 bn. India’s merchandise imports in April -July 2022-23 was $256.43 billion with an increase of 48.12% over $173.12 billion in April -July 2021-22. Exports in Apr-July is at USD 156.41 bn. Export target for this fiscal is at USD 470 bn. Trade deficit in June was at USD 26.18 bn.

S&P Global Market Intelligence said: “The eurozone economic outlook has darkened at the start of the third quarter, with the latest survey data signalling a contraction of GDP in July. Soaring inflation, rising interest rates and supply worries – notably for energy – have led to the biggest drops in output and demand seen for a almost a decade, barring pandemic lockdown months.

US Equities led Global rally in stocks, supported by earnings and better than expected services data.

Data highlights: – US ISM(non mfrg) climbed to 56.7, factory orders climbed 2% m/m.

-EU PMI(services-final) climbed to 51.2, PPI climbed 1.1% m/m, retail sales declined -1.2% m/m.

-UK PMI(services) declined to 52.6.

Thursday’s calendar : US Weekly jobless claims

-German Factory orders

-BOE MPC meeting

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 79.59. 50 day moving average is at 78.70.200 day moving average is at 76.23. Daily MACD is in sell zone. Important supports are at 78.50 and important resistances are at 79.38/79.50. Spot closed above its average level of the day.

Intraday supports and resistances for Aug contract are:

PP: 79.20, S1:78.97, S2:78.59, R1:79.58, R2:79.81.             

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

However on directional basis, suggest the following:

USDINR Exports can be hedged near 79.35 levels. Nearby imports can be hedged at 78.35.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below major moving averages. Major resistance is at 1.0270/1.0450. Next major support is at 0.9935. Daily MACD is in buy zone, implying an important bottom at 0.9935. 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 1.1750 and weekly MACD is in sell zone, implying important top at 1.3730. Important support is at 1.2040/1.1890. Important resistance is at 1.2245/1.2450.

USD/YEN: The pair is below 50 moving average, but above 200 day moving average. Daily MACD is in sell zone, implying important top at 139.40. Important support is at 131.50/130. Major resistance is at 139.40 with intermediate resistances at 135.50/137.50.

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