USDINR opened at 79.83 y’day and the pair traded in the 79.81-79.90 range. Spot USDINR closed at 79.87, unchanged for USD as against prior close of 79.87. 

RBI reference rate was fixed at 79.89 on 23/08. Aug USD/INR closed at 79.91, gain of 5 ps for USD as compared to prior day’s close of 79.86. Aug Euro/INR closed at 79.39, GBP/INR at 94.14 and Yen/INR at 58.26. USDINR fwd premia was trading at around 3.02% p.a.  FX reserves stands at USD 570 bn as on Aug 12 th.

In Aug till date FII’S have net bought Rs 17970 Cr of Equities in Cash segment and have sold Rs 4015 Cr of debt till date. In this Calendar Year, FII’S have sold close to Rs 1.78 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 86 points (0.50%) y’day. DOW declined 154 points (0.57%). Nikkei declined 1.19% and Hang Seng declined 0.78%.

Euro is now at 0.9949, Pound at 1.1813, Yen at 136.91.

Commodities: Gold is now at USD 1759 and WT1Crude at USD 93/Brent at USD 99.60.

Interest rates: USD 10 Yr yield is at 3.05% and 3 m libor closed at 2.92%. Indian 10 yr benchmark yield closed at 7.29%.

Economic news: US PMI Composite output dropped from 47.7 to 45.0, a 27-month low. Senior Economist at S&P Global Market Intelligence said:“August flash PMI data signalled further disconcerting signs for the health of the US private sector. Demand conditions were dampened again, sparked by the impact of interest rate hikes and strong inflationary pressures on customer spending, which weighed on activity. “One area of reprieve for firms came in the form of a further softening in inflationary pressures. Input prices and output charges rose at the slowest rates for a year-and-a-half amid reports that some key component costs had fallen. 

EU PMI Composite dropped from 49.9 to 49.2, an 18-month low. Economics Director at S&P Global Market Intelligence said: “The latest PMI data for the eurozone point to an economy in contraction during the third quarter of the year.

Data highlights: – US new home sales dipped to 511k.

-EU PMI(mfrg) dipped to 49.7 and PMI(services) managed to stay above 50 at 50.2.

-UK PMI(mfrg) declined to 46 and PMI(services) climbed to 52.5.

Wednesday’s calendar : – US durables order

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 79.55. 50 day moving average is at 79.17.200 day moving average is at 76.49. Daily MACD is in buy zone. Important supports are at 79.20/78.90 and important resistance is at 80.06. Spot closed above its average level of the day.

Intraday supports and resistances for Aug contract are:

PP: 79.89, S1:79.84, S2:79.78, R1:79.95, R2:80.             

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

However on directional basis, suggest the following:

USDINR imports be hedged.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below major moving averages. Major resistance is at 1.0370. Next major support is at 0.9935. Daily MACD is in sell zone, implying an important top at 1,0370. 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 1.2275 and weekly MACD is in sell zone, implying important top at 1.3730. Important support is at 1.1750. Important resistance is at 1.2040/1.2275.

USD/YEN: The pair is above 50 and 200 day moving averages. Daily MACD is in buy zone, implying important bottom at 130.40. Important support is at 130.40. Major resistance is at 139.40.

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