USDINR opened at 79.54 y’day and the pair traded in the 79.29-79.66 range. Spot USDINR closed at 79.55, gain of 10 ps for USD as against prior close of 79.45.

RBI reference rate was fixed at 79.39 on 01/09. Sep USD/INR closed at 79.78, gain of 4 ps for USD as compared to prior day’s close of 80.13. Sep Euro/INR closed at 80.06, GBP/INR at 92.45 and Yen/INR at 57.46. USDINR fwd premia was trading at around 3.03% p.a.  FX reserves stands at USD 564 bn as on Aug 26 th. FX reserves declined by USD 6 bn as compared to Aug 12 th data.

In Aug till date FII’S have net bought Rs 47437 Cr of Equities in Cash segment and have sold Rs 4895 Cr of debt till date. In this Calendar Year, FII’S have sold close to Rs 1.49 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 446 points (2.58%) on Tuesday. DOW climbed 145 points (0.46%). Nikkei declined 1.53% and Hang Seng declined 1.79%.

Euro is now at 0.9958, Pound at 1.1553, Yen at 140.

Commodities: Gold is now at USD 1709 and WT1Crude at USD 87.60/Brent at USD 93.45.

Interest rates: USD 10 Yr yield is at 3.26% and 3 m libor closed at 3.07%. Indian 10 yr benchmark yield closed at 7.25%.

Economic news: Rupee had a roller coaster ride. USDINR gained to 79.30 on flows. As flows abated, Rupee declined to 79.55. RBI has defended Rupee at 80.10 levels. FII inflows in Aug was around USD 7 bn, Crude Oil has softened, Though, the above are positives, strength in USD index due to USD rate hike expectations will continue to weigh down on possible Rupee gains.

Aug GST collections was up 28% y/y to 1.44 Lac Cr. PMI(mfrg) was robust at 56.2.

Eurozone PMI Manufacturing was finalized at 49.6 in August, down slightly from July’s 49.8. Chief Business Economist at S&P Global Market Intelligence said: “The euro area’s beleaguered manufacturers reported a further steep drop in production in August, meaning output has now fallen for three successive months to add to the likelihood of GDP falling in the third quarter.

US ISM (mfrg) was unchanged at 52.8. ISM said: “Manufacturing performed well for the 27th straight month. With (1) supplier delivery performance recording its fourth straight month of improvement, (2) price increase growth slowing significantly for the second consecutive month, (3) hiring and total employment both positive and expanding and (4) lead times easing across all three categories of purchasing activity, the sector is at or approaching supply/demand equilibrium.

Data highlights: – US Weekly jobless claims was reported at 232k, ISM(mfrg remained in expansion mode at 52.8 and construction spending declined -0.4% m/m.

-EU Unemployment rate and PMI(mfrg) was in contraction mode at 49.6.

-UK PMI(mfrg-final) was better than expected at 47.3.

Friday’s calendar : – US employment data and factory orders

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 79.30.200 day moving average is at 76.61. Daily MACD is in sell zone. Important supports are at 79.30/79.18 and important resistance is at 79.70. Spot closed above its average level of the day.

Intraday supports and resistances for Sep contract are:

PP: 79.89, S1:79.46, S2:79.19, R1:80.16, R2:80.59.             

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 1.1645. Important resistance is at 1.19/1.2040/1.2275.

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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