USDINR opened at 79.63 y’day and the pair traded in the 79.46-79.72 range. Spot USDINR closed at 79.53, loss of 5 ps for USD as against prior close of 79.58.

RBI reference rate was fixed at 79.68 on 12/09. Sep USD/INR closed at 79.63, loss of 7 ps for USD as compared to prior day’s close of 79.70. Sep Euro/INR closed at 80.75, GBP/INR at 93.03 and Yen/INR at 55.94. USDINR fwd premia was trading at around 2.90% p.a.  FX reserves stands at USD 553 bn as on Sep 9 th. FX reserves declined by USD 11 bn as compared to Aug 26 th data.

In Sep till date FII’S have net bought Rs 1333 Cr of Equities in Cash segment and have bought Rs 167 Cr of debt till date. In this Calendar Year, FII’S have sold close to Rs 1.50 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 103 points (0.58%). DOW climbed 229 points (0.71%). Nikkei climbed 1.16% and Hang Seng climbed 2.69%.

Euro is now at 1.0135, Pound at 1.1696, Yen at 142.49.

Commodities: Gold is now at USD 1727 and WT1Crude at USD 87/Brent at USD 93.

Interest rates: USD 10 Yr yield is at 3.34% and 3 m libor closed at 3.16%. Indian 10 yr benchmark yield closed at 7.14%.

Economic news: CPI surged to 7% in Aug as compared to 6.7% in July. Food inflation climbed to 7.62%. IIP tumbled to 2.4% in July. Mfrg grew by 3.2%. Mining contracted 3.3% and Power generation grew 2.3%. Average Inflation has consistently remained above 7% in the last few months.

UK GDP grew 0.2% mom in July, below expectation of 0.3% mom. Services grew 0.4% mom. Production dropped -0.3% mom. Construction also contracted -0.8% mom. For the three months to July, GDP was flat compared with the previous three months.

Data highlights: – UK industrial production declined -0.3% m/m and manufacturing production increased 0.1% m/m.

Tuesday’s calendar : – US CPI

-EU and German Zew surveys

-UK unemployment rate

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 79.72. 50 day moving average is at 79.54.200 day moving average is at 76.85. 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: 79.75, S1:79.43, S2:79.25, R1:79.94, R2:80.25.             

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 1.0110/1.0360. Next major support is at 0.9865. Daily MACD is in buy zone, implying an important bottom at 0.9865. 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 139.50. Major resistance is at 145.

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