FX – MORNING UPDATE :

USDINR opened at 79.66 y’day and the pair traded in the 79.65-79.83 range. Spot USDINR closed at 79.72, loss of 18 ps for USD as against prior close of 79.90.

RBI reference rate was fixed at 79.67 on 08/09. Sep USD/INR closed at 79.81, loss of 27 ps for USD as compared to prior day’s close of 80.08. Sep Euro/INR closed at 80.03, GBP/INR at 92.13 and Yen/INR at 55.71. USDINR fwd premia was trading at around 2.90% 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.

PAIRSRBI REF RATE (08/09)
USDINR79.67
EURINR79.75
GBPINR91.74
JPYINR55.49

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 174 points (1%). DOW climbed 193 points (0.61%). Nikkei climbed 2.31% and Hang Seng declined 1%.

Euro is now at 1.0050, Pound at 1.1547, Yen at 143.74.

Commodities: Gold is now at USD 1725 and WT1Crude at USD 83/Brent at USD 89.

Interest rates: USD 10 Yr yield is at 3.32% and 3 m libor closed at 3.19%. Indian 10 yr benchmark yield closed at 7.13%.

Economic news: ECB increased three key interest rates by 75bps.The main refinancing , marginal lending facility and deposit facility rates are 1.25%, 1.50% and 0.75% respectively. The Governing Council also expects to raise interest rates further over the “next several meetings”. Decisions will continue to be “data-dependent” and follow a “meeting-by-meeting approach”.

ECB staff projections now show inflation averaging 8.1% in 2022, 5.5% in 2023, and then 2.3% in 2024. Recent data point to a “substantial slowdown” in growth, with the economy expected to “stagnate later in the year and in Q1 of 2023. Staff now projects the economy to grow by 3.1% in 2022, 0.9% in 2023, and then 1.9% in 2024.

Fed Chairman said that Fed is “strongly committed” to controlling inflation but there remains hope it can be done without the “very high social costs” involved in prior inflation fights.

Data highlights: – US Weekly jobless claims was reported at 222k.

Friday’s calendar : – No major data release.

USD/INR   79.8479.65
EUR/USD      1.00501.00290.9932
GBP/USD      1.15471.15601.1461
USD/JPY      143.74144.54143.32

Daily Support/Resistance table

Currency PairsPivotR1R2R3S1S2S3
EURO/USD0.99901.00481.00871.01450.99510.98930.9854
GBP/USD1.15141.15671.16131.16651.14681.14151.1369
USD/JPY143.91144.50145.12145.71143.28142.70142.07
USD/INR79.7379.8179.91 79.6379.55 

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency PairSupportsResistancesTrendRemarks
EURO/USD0.99101.0090/1.0270DNSIDE>1.0090
GBP/USD1.14101.1710/1.19DNSIDE>1.1720
USD/JPY139/137.70141.40/142.90UPSIDE<137.70
USD/INR79.30/79.1879.94/80.12UPDN<79.20
USD/CHF0.97/0.95700.9890UPDN<0.9570

Technicals: Spot closed above 200 day major moving averages.20 day moving average is at 79.71. 50 day moving average is at 79.54.200 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 below its average level of the day.

Intraday supports and resistances for Sep contract are:

PP: 79.87, S1:79.70, S2:79.60, R1:79.97, R2:80.14.             

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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