USDINR opened gap up at 81.52 y’day and the pair traded in the 81.43-81.66 range. Spot USDINR closed at 81.62, gain of 63 ps for USD as against prior close of 80.99.
RBI reference rate was fixed at 81.575 on 26/09. Sep USD/INR closed at 81.71, gain of 59 ps for USD as compared to prior day’s close of 81.12. Sep Euro/INR closed at 78.71, GBP/INR at 88.05 and Yen/INR at 56.66. USDINR fwd premia was trading at around 2.70% p.a. FX reserves stands at USD 545 bn as on Sep 16 th. FX reserves further declined by USD 5 bn, compared to prior week.
|PAIRS||RBI REF RATE (26/09)|
In Sep till date FII’S have net bought Rs 4378 Cr of Equities in Cash segment and have bought Rs 5912 Cr of debt till date. In this Calendar Year, FII’S have sold close to Rs 1.47 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 305 points (-1.76%). DOW declined 329 points (-1.11%). Nikkei declined 2.66% and Hang Seng declined 0.44%.
Euro closed the week at 0.9631, Pound at 1.0759 Yen at 144.58.
Commodities: Gold is now at USD 1637 and WT1Crude at USD 77/Brent at USD 83.20.
Interest rates: USD 10 Yr yield is at 3.87% and 3 m libor closed at 3.48%. Indian 10 yr benchmark yield closed at 7.39%.
Economic news: Rupee declined to 81.65, tracking USD strength against majors. RBI has already spent USD 105 bn in maintaining Rupee level below 80. FX reserves has declined to USD 545 bn. With USD climbing steeply against majors on Friday, Rupee’s decline will continue. RBI may smoothen the fall with sporadic intervention.
Sterling nose dived as UK’S mini budget left investors worried over Govt’s ability to manage ballooning deficit. GBP/USD fell to 1.0385. However, it is steadily recovering from its lows.
ECB Chairperson said that “The risks to the inflation outlook are primarily on the upside, mainly reflecting the possibility of further major disruptions in energy supplies,” she said. “While these risk factors are the same for growth, their effect would be the opposite: they would increase inflation but reduce growth.”
Crude declined to 83.
RBI’S meeting on Friday could see rate hike by 40 bps.
Data highlights: – German Ifo declined to 84.3.
Tuesday’s calendar : US Durables order, new home sales, consumer confidence and house price index.
-German retail sales.
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 79.90. 50 day moving average is at 79.75.200 day moving average is at 77.10. Daily MACD is in buy zone. Important supports are at 81.24/80.78 and important resistance is at 81.65. Spot closed above its average level of the day.
Intraday supports and resistances for Sep contract are:
PP: 81.54, S1:81.36, S2:81.26, R1:81.63, R2:81.82.
Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.
However on directional basis, suggest the following:
USDINR imports be hedged at 80.78/80.60.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is below major moving averages. Major resistance is at 0.9860/1.02. Next major support is at 0.96. Daily MACD is in sell zone, implying an important top at 1.02. 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 1.07. Important resistance is at 1.14.
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 140.50/137.50. Major resistance is at 145.
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