USDINR opened at 80.28 y’day and the pair traded in the 80.26-80.78 range. Spot USDINR closed at 80.73, gain of 75 ps for USD as against prior close of 79.97.

RBI reference rate was fixed at 80.72 on 22/09. Sep USD/INR closed at 80.93, gain of 93 ps for USD as compared to prior day’s close of 80. Sep Euro/INR closed at 79.84, GBP/INR at 91.41 and Yen/INR at 56.76. USDINR fwd premia was trading at around 2.70% 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 7824 Cr of Equities in Cash segment and have bought Rs 1786 Cr of debt till date. In this Calendar Year, FII’S have sold close to Rs 1.44 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 107 points (-0.35%). DOW declined 522 points (-1.74%). Nikkei declined 0.58% and Hang Seng declined 1.61%.

Euro is now at 0.9812, Pound at 1.1225, Yen at 144.39.

Commodities: Gold is now at USD 1682 and WT1Crude at USD 83.70/Brent at USD 090.65.

Interest rates: USD 10 Yr yield is at 3.71% and 3 m libor closed at 3.48%. Indian 10 yr benchmark yield closed at 7.27%.

Economic news: Rupee declined 76 ps, tracking USD’S rise after Fed meeting. RBI refrained from intervention. RBI has already spent USD 100 bn in maintaining Rupee level below 80. Fall in Crude price has given some cushion to RBI and tolerance for Rupee decline. Rupee is on track to hit 81.25 levels. USDINR pair could consolidate above 80.

BoE raised Bank rate by 50bps to 2.25% as widely expected. BoE also said that the MPC will consider and make decision on the Bank Rate “at each meeting”. The scale, pace and timing of any further changes will reflect the assessment of economic outlook and inflationary pressures. It maintain the pledge to “respond forcefully” if outlook suggests “more persistent inflation pressures”.

Bank of Japan intervened to support Yen.

Data highlights: – – US Weekly jobless claims was reported at 213k.

Friday’s calendar : US PMI(mfrg) and PMI(services)

-EU PMI(mfrg) and PMI(services)

-UK PMI(mfrg) and PMI(services)

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 79.70. 50 day moving average is at 79.68.200 day moving average is at 76.98. Daily MACD is in buy zone. Important supports are at 80.12 and important resistance is at 81.25. Spot closed above its average level of the day.

Intraday supports and resistances for Sep contract are:

PP: 80.63, S1:80.28, S2:79.81, R1:81.10, R2:81.45.             

Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.

However on directional basis, suggest the following:

USDINR imports be hedged at 80.15 and exports be hedged at 81.20+.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below major moving averages. Major resistance is at 1.02/1.0360. 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 1.1740 and weekly MACD is in sell zone, implying important top at 1.3730. Important support is at 1.1405/1.1270. Important resistance is at 1.1740/1.19.

USD/YEN: The pair is above 50 and 200 day moving averages. Daily MACD is in sell zone, implying important top at 145. Important support is at 141.50/137.50. Major resistance is at 145.