USDINR opened at 81.65 on Tuesday and the pair traded in the 81.35-81.68 range. Spot USDINR closed at 81.52, loss of 35 ps for USD as against prior close of 81.87. FX market was closed y’day.

RBI reference rate was fixed at 81.42 on 04/10. Oct USD/INR closed at 81.82, loss of 19 ps for USD as compared to prior day’s close of 82.01. Oct Euro/INR closed at 80.97, GBP/INR at 92.73 and Yen/INR at 56.62. 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 386 points (2.29%) on Tuesday. DOW declined 42 points (-0.15%). Nikkei climbed 0.48% and Hang Seng climbed 5.79%.

Euro is now at 0.9917, Pound at 1.1364, Yen at 144.63.

Commodities: Gold is now at USD 1730 and WT1Crude at USD 88/Brent at USD 93.50.

Interest rates: USD 10 Yr yield is at 3.755% and 3 m libor closed at 3.62%. Indian 10 yr benchmark yield closed at 7.36%.

Economic news: ECB meeting is the important event for the day.

US Bonds rallied alongside stocks on Tuesday, with Treasury yields falling for a second straight day. The benchmark U.S. 10-year note tumbled to around 3.6% after topping a 2008 high of 4% last week. The U.S. dollar index also fell lower.

Chief Business Economist at S&P Global Market Intelligence said: “Any hopes of the eurozone avoiding recession are further dashed by the steepening drop in business activity signaled by the PMI. Not only is the survey pointing to a worsening economic downturn, but the inflation picture has also deteriorated, meaning policymakers face an increasing risk of a hard landing as they seek to rein in accelerating inflation.

Oil prices rose as OPEC cut supply by 2 mn bpd, defying US pressure to increase supplies. US Government is likely to respond to the OPEC cut by releasing more oil from its Strategic Petroleum Reserve (SPR). The Biden administration has already drawn the SPR to its lowest level since 1984, in a bid to reduce fuel prices ahead of the November midterm elections. 

Data highlights: – US ISM(mfrg) declined to 50.9 and construction spending declined -0.7% m/m, factory orders was flat m/m.

-US ADP showed that private sector added 208k jobs, ISM(non mfrg) climbed to 56.7.

-EU PPI climbed 5% m/m. PMI(services) was finalized at 48.8.

-UK PMI(services)  climbed to 50.

Thursday’s calendar : -US Weekly jobless claims

-EU retail sales, German factory orders

-UK PMI(construction).

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 80.48. 50 day moving average is at 79.97.200 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 above its average level of the day.

Intraday supports and resistances for Oct contract are:

PP: 81.76, S1:81.58, S2:81.35, R1:82, R2:82.17.             

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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