USDINR opened at 79.81 y’day and the pair traded in the 79.82-79.89 range. Spot USDINR closed at 79.87, gain of 6 ps for USD as against prior close of 79.81. 

RBI reference rate was fixed at 79.87 on 25/08. Aug USD/INR closed at 79.91, gain of 4 ps for USD as compared to prior day’s close of 79.87. Aug Euro/INR closed at 79.84, GBP/INR at 94.70 and Yen/INR at 58.63. USDINR fwd premia was trading at around 3.03% 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 declined 82 points (0.47%) y’day. DOW climbed 322 points (0.98%). Nikkei climbed 0.58% and Hang Seng climbed 3.63%.

Euro is now at 0.9968, Pound at 1.1818, Yen at 136.75.

Commodities: Gold is now at USD 1766 and WT1Crude at USD 93/Brent at USD 100.

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 7.30%.

Economic news: Based on the second estimate, US GDP contracted at -0.6% annualized rate in Q2, comparing to first estimate of -0.9%, PCE price index and core PCE price index were left unchanged at 7.1% and 4.4% respectively.

In the accounts of ECB’s July 20-21 meeting, it’s noted that “a very large number of members” agreed that it was appropriate to hike interest rates by 50bps. The 50bps hike was seen as “warranted in view of the worsening of the inflation outlook since the Governing Council’s June meeting”.

Data highlights: – US Weekly jobless claims dipped to 243k.

-German Ifo survey climbed to 88.5.

Friday’s calendar : – US Personal income, spending and core PCE index

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 79.24.200 day moving average is at 76.49. Daily MACD is in buy zone. Important supports are at 79.70/79.55 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, S1:79.83, S2:79.75, R1:79.97, R2:80.03.             

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.