FX MORNING UPDATE 

USDINR opened at 82.65 y’day and the pair traded in the 82.62-82.82 range. Spot USDINR closed at 82.78, gain of 8 ps for USD as against prior close of 82.70.

RBI reference rate was fixed at 82.76 on  02/11Nov USD/INR closed at 82.93, gain of 8 ps for USD as compared to prior day’s close of 82.85. Nov Euro/INR closed at 82.16, GBP/INR at 95.42 and Yen/INR at 56.61. USDINR fwd premia was trading at around 2.38% p.a.  FX reserves stands at USD 528.36 bn as on Oct 14 th.  FX reserves declined by USD 4.5 bn as compared to previous fortnight.

PAIRSRBI REF RATE (02/11)
USDINR82.76
EURINR81.78
GBPINR95.21
JPYINR56.16

In Oct, FII’S bought Rs 8430 Cr of Equities and sold Rs 3028 Cr of debt till date. In this Calendar Year, FII’S have sold close to Rs 1.37 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 62 points (0.34%) y’day. DOW declined 505 points (1,55%). Nikkei declined 0.06% and Hang Seng climbed 2.41%.

Euro is now at 0.9835, Pound at 1.1416, Yen at 147.29.

Commodities: Gold is now at USD 1640 and WT1Crude at USD 89.50/Brent at USD 95.50.

Interest rates: USD 10 Yr yield is at 4.11% and 3 m libor closed at 4.44%. Indian 10 yr benchmark yield closed at 7.40%.

Economic news: USD rose after Fed Chair’s press conference as he pushed against slow down of rate hikes. Fed raised rates by 75 bps. Fed Chairman said that employment is robust unusually and consumer savings is keeping demand high. Housing markets have not cooled off. He added that inflation which ought to have come down as supply side issues have been resolved has not materialized. He added that Fed could afford over tightening, but cannot fall behind inflation curve as it would be costly for the economy. He said that if overtightening results in inflation decline and economic decline, Fed has tools to support the economy back to normalcy. He said that it is premature to talk about final rates, though such a situation could emerge in future. He also said that Yield curve has to be monitored for financial tightening as borrowing is dependent on that.

US stocks tumbled as Fed Chief added that incoming data since last meeting suggests that the ultimate level of interest rates will be higher than previously expected. He also added that the path to achieve soft landing has narrowed as inflation has not come down.

BOE meeting outcome will be known later today.

Data highlights: – – US ADP employment report showed that 239 k jobs were added in private sector.

-EU PMI(mfrg-final) dipped to 46.4.

Thursday’s calendar : US Weekly jobless claims and ISM(non mfrg)

-UK PMI(services-final)

USD/INR   82.8282.63
EUR/USD       0.98350.99770.9812
GBP/USD       1.14161.15661.1387
USD/JPY       147.29148.01145.68

Daily Support/Resistance table

Currency PairsPivotR1R2R3S1S2S3
EURO/USD0.98690.99261.00331.00900.97610.97050.9597
GBP/USD1.14471.15071.16261.16861.13281.12681.1149
USD/JPY147.32148.96150.03151.67146.26144.61143.55
USD/INR82.7482.8682.94 82.6682.54 

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency PairSupportsResistancesTrendRemarks
EURO/USD0.98451.01/1.02SIDEDN<0.9840
GBP/USD1.14401.1740UPDN<1.1440
USD/JPY144/140.40152UPSIDE<144
USD/INR82.50/82.1283.30UPSIDE<82.12
USD/CHF0.98/0.970.9945/1.0060SIDEUP>0.9945

Technicals: Spot closed above 200 day major moving averages.20 day moving average is at 82.41. 50 day moving average is at 81.04.200 day moving average is at 77.90. Daily MACD is in buy zone. Important support is at 82.50/82.12 and important resistance is at 83.30. Spot closed above its average level of the day.

Intraday supports and resistances for Nov contract are:

PP: 82.91, S1:82.82, S2:82.71, R1:83.02, R2:83.11.             

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

However on directional basis, suggest the following:

USDINR imports be hedged .

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is above 50 and 20 day major moving averages. Major resistance is at 1.01/1.02. Next major support is at 0.9845. Daily MACD is in buy zone, implying an important bottom at 0.9540. Weekly MACD is in sell zone, implying important top at 1.1498.

GBP/USD: The pair is below 50 and 20 day moving averages. Daily MACD is in buy zone, implying important bottom at 1.0380 and weekly MACD is in buy zone, implying important bottom at 1.0380. Important support is at 1.1440. Important resistance is at 1.1740.

USD/YEN: The pair is above 50 and 200 day moving averages. Daily MACD is in sell zone, implying important top at 152. Important support is at 144/140.40. Major resistance is at 152.

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