FX RATES AND USDINR FWDS :
Major developments:
USD is now at 83.22. USDINR opened at 83.20. Fwd premia – 1 year fwd premia is at 1.83% p.a.
-US NFP was stronger than expected (almost double the expectation).
-Israel- Hamas conflict aids Crude price rally.
-Indian 10 Year yield is at 7.35% as RBI has hinted at more bond sales to suck out liquidity.
-Indian CPI, IIP and US CPI are important data events for the week.
USDINR View: RBI’S intervention keeps Rupee away from a significant decline. On the downside, USDINR may have strong support at 83/82.80. Rupee’s Monthly range (hi/lo) is the lowest in last 15 months. It shows how volatility is being controlled by RBI. Implied volatility is below 3% p.a. now. It used to average 5% and spike to 8% during Rupee weakness. Expect 83-83.70 range for USDINR in Oct.
RBI rates
| Trade Date | 1 USD | 1 GBP | 1 EUR | 100 YEN |
| 6-Oct-23 | 83.24 | 101.29 | 87.68 | 55.88 |
-USDINR is at 83.22.Prior day’s close was 83.19.
-Indian Equity indices decline.
-Indian 10 year G-SEC yield is at 7.35%.
-USDINR 1 yr fwd premia is at 1.83%.
USDINR @ 83.22, EUR/USD@ 1.0550, GBP/USD @ 1.2195, USD/JPY @ 149.19, EUR/INR @ 87.85, GBP/INR @ 101.49, JPY/INR @ 55.78.
Gold@1850, Brent Crude @ 87.50, Nifty @ 19575(-78), 10 Year G-SEC @ 7.35%.
Hedging:
USDINR payables can be hedged at 83. Eur receivables can be hedged on rally to 88/88.70.
GBPINR receivables can be hedged closer to 102.40/103.75.
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