FX – MORNING UPDATE :

USDINR opened at 82.99 y’day and the pair traded in the 82.99-83.03 range. Spot USDINR closed at 83.02, gain of 2 ps for USD as against prior close of 83.

RBI reference rate was fixed at 83.02 on 13/02. Feb USD/INR closed at 83.04, gain of 2 ps for USD as compared to prior day’s close of 83.02. Feb Euro/INR closed at 89.60, GBP/INR at 105.22 and Yen/INR at 55.73. 1 year USDINR fwd premia was trading at around 1.81% p.a.  FX reserves stood at USD 622 bn, as on Feb 2 nd.

In Feb, FPI’S have sold Rs 4814 Cr of Equities and bought Rs 12501 Cr of debt . In last calendar year, FII’S have net bought Rs 172853 Cr of Equities and have net bought Rs 70489 Cr of debt.

Benchmark Nifty climbed 127 points (0.59%) y’day. US S&P declined 68 points (1.37%) y’day. Nikkei climbed 2.97% y’day and Hang Seng declined 0.83% on Friday.

Euro is now at 1.0706, Pound at 1.2588, Yen at 150.59.

Commodities: Gold is now at USD 1989 and WT1Crude at USD 77.60/Brent at USD 82.40.

Interest rates: USD 10 Yr yield is at 4.32% and 3 m libor closed at 5.52%. Indian 10 yr benchmark yield closed at 7.09%.

Economic news: US CPI rises 0.3% mom in January, above expectation of 0.2% mom. CPI core (all items less food and energy) rise 0.4% mom, above expectation of 0.3% mom.

USD gained on strong CPI data. US Yield climbs to 4.3%.

Data highlights: – US CPI climbed 0.3% m/m and 3.1% y/y.

-EU and German Zew surveys improved to 25 and 19.9 respectively.

-UK claimant count change  dipped to 14.1 k and unemployment rate declined to 3.8%.

Wednesday’s calendar : –  UK CPI, RPI and PPI(output)

Daily Support/Resistance table

 MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed below 20 and 50 day average but above 200 day moving averages.20 day moving average is at 83.05. 50 day moving average is at 83.16.200 day moving average is at 82.80. Daily MACD is in sell zone. Important support is at 82.80 and important resistance is at 83.08/83.18. Spot closed  above the average level of the day.

Intraday supports and resistances for Feb contract are:

PP: 83.05, S1:83.025, S2:83, R1:83.07, R2:83.10.             

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

However on directional basis, suggest the following:

USD exports be hedged at 83.35/83.40. Imports be hedged at 82.92/82.80 for 3 months.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below major moving averages. Major resistance is at 1.0830/1.0890. Next major support is at 1.0725. Daily MACD is in sell zone, implying an important top at 1.1275. Weekly MACD is in buy zone, implying important bottom at 1.0450.

GBP/USD: The pair is between major moving averages. Daily MACD is in sell zone, implying important top at 1.2810 and weekly MACD is in buy zone, implying important bottom at 1.25. Important support is at 1.2480. Important resistance is at 1.2695/1.2775.

USD/YEN: The pair is above all major moving averages. Daily MACD is in buy zone, implying important bottom at 145.90. Important resistance is at 150 and support is at 146/144.35.

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