USDINR opened gap up at 81.84 y’day and the pair traded in the 81.82-81.95 range. Spot USDINR closed at 81.94, gain of 37 ps for USD as against prior close of 81.57.

RBI reference rate was fixed at 81.90 on 28/09. Oct USD/INR closed at 82.24, gain of 40 ps for USD as compared to prior day’s close of 81.84. Oct Euro/INR closed at 78.81, GBP/INR at 86.90 and Yen/INR at 57.02. USDINR fwd premia was trading at around 2.75% 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.

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 climbed 548 points (1.88%). DOW declined 329 points (-1.11%). Nikkei declined 1.5% and Hang Seng declined 3.41%.

Euro closed the week at 0.9688, Pound at 1.0808, Yen at 144.26.

Commodities: Gold is now at USD 1665 and WT1Crude at USD 82/Brent at USD 88.

Interest rates: USD 10 Yr yield is at 3.73% and 3 m libor closed at 3.62%. Indian 10 yr benchmark yield closed at 7.30%.

Economic news: Rupee declined to 91.95 after gap opening. There is no respite for Rupee fall with RBI refraining from large intervention.

BoE announced today to carry out temporary purchases of long-dated UK government bonds, to “restore orderly market conditions”. It warned that the significant repricing of UK and global financial assets “has become more significant in the past day”, particularly affecting long-dated government debt. Continuing or worsening dysfunction would be a “material risk” to financial stability.

BOE’S decision did not help Pound to recover in any significant manner.

ECB President Christine Lagarde said in a conference today, “we have to return inflation to 2% in the medium term, and we will do what we have to do, which is to continue hiking interest rates in the next several meetings.“Our primary goal is not to create a recession. Our primary objective is price stability and we have to deliver on that. If we were not delivering, it would hurt the economy far more,” she said, adding that the “first destination” of rate hikes will be to reach neutral rate.

ECB Governing Council member Robert Holzmann said “50 may be the minimum” rate hike at next meeting in October.

RBI’S meeting on Friday could see rate hike by 40 bps.

Data highlights: – US pending home sales declined -2% m/m.

Thursday’s calendar : US GDP(Final) and weekly jobless claims

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 80.10. 50 day moving average is at 79.83.200 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 Oct contract are:

PP: 82.15, S1:82.02, S2:81.81, R1:82.02, R2:81.81.             

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

However on directional basis, suggest the following:

USDINR imports be hedged at 81.24/80.80.

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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