USDINR opened at 79.81 y’day and the pair traded in the 79.81-79.91 range. Spot USDINR closed at 79.85, gain of 5 ps for USD as against prior close of 79.80.

RBI reference rate was fixed at 79.89 on 05/09. Sep USD/INR closed at 79.97, loss of 8 ps for USD as compared to prior day’s close of 80.05. Sep Euro/INR closed at 79.48, GBP/INR at 92.03 and Yen/INR at 57.07. USDINR fwd premia was trading at around 2.95% 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 126 points (0.72%). DOW declined 337 points (1.07%). Nikkei declined 0.11% and Hang Seng declined 1.16%.

Euro is now at 0.9963, Pound at 1.1588, Yen at 140.41.

Commodities: Gold is now at USD 1729 and WT1Crude at USD 89/Brent at USD 95.45.

Interest rates: USD 10 Yr yield is at 3.21% and 3 m libor closed at 3.19%. Indian 10 yr benchmark yield closed at 7.20%.

Economic news: Euro remains the worst performer for the day so far, as weighed down by the news that Russia’s state-controlled Gazprom would stop gas delivery via the Nord Stream 1 due to a fault. Russia’s move on Friday came as a response to the G-7’s decision to impose a price cap on Russian oil exports. OPEC + has agreed to cut Oil production by 100,000 barrels per day from Oct.

Indian trade deficit widens to USD 28.68 bn, with exports flat and imports climbing 37% y/y. 

Imports is at US D 61.68 bn and exports is at USD 33 bn. Oil imports jumped 86.4% to USD 

17.6 bn. Apr-Aug exports is at USD 192.52 bn, up 17.12% and Imports is at USD 317.8 bn, up 

45.64%. In Apr-Aug period, trade deficit expanded to USD 125.22 bn from USD 53.78 bn 

during the same period last year. 

Data highlights: – EU PMI(services-final) declined to 49.8, sentix investor confidence declined to -31.8. Eurozone retail sales volume rose 0.3% mom in in July, below expectation of 0.6% mom.

-UK PMI(services-final) declined to 50.9.

Tuesday’s calendar : – US ISM(non mfrg)

-German factory orders

-UK PMI(construction)

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 79.65. 50 day moving average is at 79.45.200 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 80.12. Spot closed at its average level of the day.

Intraday supports and resistances for Sep contract are:

PP: 79.97, S1:79.86, S2:79.67, R1:80.16, R2:80.27.             

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 1.0090/1.0270. Next major support is at 0.9910. 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 1.1410. Important resistance is at 1.1710/1.19.

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 139/137.70. Major resistance is at 141.40/142.90.

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