USDINR opened lower at 82.60 on Friday and the pair traded in the 82.43-82.72 range. Spot USDINR closed at 82.44, loss of 44 ps for USD as against prior close of 82.88. Rupee gained due to strong FPI inflows on Friday. FII’S have been investing since Aug after heavy pull out in first 7 months of this calendar year. Gain in Yuan and rumors of China reopening economy completely with a roll back on zero covid policy also lifted sentiments across asset markets. However, rally in Crude and Commodity prices could be inflationary and expand trade deficit.
RBI reference rate was fixed at 82.53 on 04/11. Nov USD/INR closed at 82.38, loss of 65 ps for USD as compared to prior day’s close of 83.03. Nov Euro/INR closed at 80.97, GBP/INR at 92.51 and Yen/INR at 55.97. USDINR fwd premia was trading at around 2.25% p.a. FX reserves stands at USD 531 bn as on Oct 28 th. FX reserves jumped by USD 6.5 bn as compared to previous fortnight.
|PAIRS||RBI REF RATE (04/11)|
In Nov, FII’S bought Rs 8363 Cr of Equities and sold Rs 382 Cr of debt till date. In this Calendar Year, FII’S have sold close to Rs 1.29 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 64 points (0.36%) on Friday. DOW climbed 401 points (1.26%). Nikkei declined 1.68% and Hang Seng climbed 5.36%.
Euro closed the week at 0.9958, Pound at 1.1377, Yen at 146.65.
Commodities: Gold is now at USD 1685 and WT1Crude at USD 92.60/Brent at USD 100.45.
Interest rates: USD 10 Yr yield is at 4.16% and 3 m libor closed at 4.55%. Indian 10 yr benchmark yield closed at 7.48%.
Economic news: The rumor of earlier reopening in China seemed to have overwhelmed other heavy weight events in the markets last week, including Fed’s hawkish rate hike and non-farm payroll report. No official announcement was made by the Chinese government on changing its zero-COVID policy yet. Crude and industrial commodity prices climbed steeply.
US non-farm payroll employment grew 261k in October, well above expectation of 200k. Prior month’s figure was also revised sharply higher from 263k to 315k. Monthly job growth has averaged 407k thus far in 2022.Unemployment rate rose from 3.5% to 3.7%. Labor force participation rate, dropped -0.1% to 62.2%. Average hourly earnings rose 0.4% mom, above expectation of 0.3% mom.
Data highlights: – – EU PPI climbed 1.6% m/m, German factory orders declined 4% m/m.
-UK PMI(construction) climbed to 53.2.
Monday’s calendar : – German Industrial production and EU sentix survey.
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 82.46. 50 day moving average is at 81.20.200 day moving average is at 78.07. Daily MACD is in buy zone. Important support is at 82.12/81.95 and important resistance is at 82.90. Spot closed below its average level of the day.
Intraday supports and resistances for Nov contract are:
PP: 82.53, S1:82.15, S2:81.92, R1:82.76, R2:83.14.
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 0.9730. Daily MACD is in buy zone, implying an important bottom at 0.9535. Weekly MACD is in buy zone, implying important bottom at 0.9535.
GBP/USD: The pair is above 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 1.1150. Important resistance is at 1.1650.
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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