USDINR opened at 81.57 on Friday and the pair traded in the 81.15-81.69 range. Spot USDINR closed at 81.35, loss of 50 ps for USD as against prior close of 81.85.

RBI reference rate was fixed at 81.55 on 29/09. Oct USD/INR closed at 81.71, loss of 30 ps for USD as compared to prior day’s close of 82.01. Oct Euro/INR closed at 79.95, GBP/INR at 90.55 and Yen/INR at 56.67. USDINR fwd premia was trading at around 2.78% p.a.  FX reserves stands at USD 537 bn as on Sep 23 rd. FX reserves further declined by USD 8 bn, compared to prior week.

In Sep  FII’S sold Rs 3750 Cr of Equities in Cash segment and have bought Rs 4809 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 276 points (1.64%). DOW declined 500 points (-1.71%). Nikkei declined -1.83% and Hang Seng climbed 0.33%.

Euro is now at 0.9823, Pound at 1.1166, Yen at 144.63.

Commodities: Gold is now at USD 1668 and WT1Crude at USD 79.75/Brent at USD 85.55.

Interest rates: USD 10 Yr yield is at 3.82% and 3 m libor closed at 3.62%. Indian 10 yr benchmark yield closed at 7.39%.

Economic news: RBI hiked repo rates by 50 bps to 5.9%. GDP is expected to be 7% and Inflation is expected to be 6.7% in this fiscal. RBI Governor said that no forward guidance is possible and monetary policy will evolve with data and Global developments.

India’s CAD in Q1 stands at USD 23.9 bn (2.8% of GDP), up from 1.5% of GDP in last fiscal. Trade deficit expanded to USD 68.6 bn (7.8% of GDP). During April-August, India’s trade deficit rose to $125.22 billion versus $53.78 billion the same time last year. Services exports grew by 35.4% and remittances grew 22.6%. Invisible surplus helped to rein CAD to 2.8% of GDP.

In the first quarter of the current fiscal year, India’s net foreign direct investment rose to $13.6 billion from $11.6 billion a year ago.Net foreign portfolio investment, however, showed an outflow of $14.6 billion as against net inflows worth $400 million in the first quarter of the previous fiscal year.

Net external commercial borrowing recorded an outflow of $3 billion in April-June versus an inflow of $200 million a year ago.

In a separate release, the RBI said at the end of June 2022, India’s external debt was at $617.1 billion, showing a decrease of $2.5 billion over its level at the end of March. The external debt to GDP ratio declined to 19.4 per cent at June-end 2022 from 19.9 per cent at March-end 2022, the RBI said.

Rupee gained as RBI announced a special Window for Oil companies to buy USD to the extent of USD 9.7 bn.

Core sector growth declined to 3.3% in Aug, lowest in 9 months. The production growth of eight infrastructure sectors — coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity — was 9.8 per cent during April-August this fiscal, compared to 19.4 per cent a year ago.

Data highlights: – US Personal income grew 0.3%, spending climbed 0.4% m/m, Core PCE index climbed 0.6% m/m.

-EU CPI climbed 10% y/y  and unemployment rate was reported at 6.6%.

Monday’s calendar : US ISM(mfrg) and construction spending

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 80.30. 50 day moving average is at 79.90.200 day moving average is at 77.28. Daily MACD is in buy zone. Important supports are at 81.24/80.86 and important resistance is at 81.95/82.15. Spot closed below its average level of the day.

Intraday supports and resistances for Oct contract are:

PP: 81.66, S1:81.38, S2:81.06, R1:82.98, R2:82.26.             

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 0.9560. 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 1.04. Important resistance is at 1.13/1.14.

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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