Currency Map:

USD/INR 74.66 75.37 -0.94
EUR/INR 85.16 85.74 -0.67
GBP/INR 101.96 101.89 0.07
JPY/INR 65.04 64.91 0.20

Brent Crude closed at USD 92 VS prior week close of USD 95. Gold closed at USD 1900.Nifty closed at 17276 vs prior week close of 17374. 10 Year G-SEC Yield closed at 6.67%.

Major developments: USDINR traded in the 74.61-75.71 range and closed at 74.66 as against prior week close of 75.37. Rupee gained 0.94% w/w. EUR declined 0.67% and GBP gained 0.07% w/w against Rupee. Indian benchmark Equity index declined 0.56% w/w. 10 Year G-SEC Yield closed at 6.67%. 1 year fwd premia is at 4% p.a.

Rupee regained to enter into its consolidation phase despite heavy Global uncertainty. Rupee reversed its prior week’s losses. Fwd premia edged higher back to 4% p.a. Treasury yields declined with 10 Year retracing to 6.62% from its recent highs of 6.95%.

Indian Equity markets continued to remain volatile, tracking Global volatility in stocks. LIC IPO is expected next month.

USDINR could trade in the 74-76.50 range for this year. In Feb, USDINR could trade in the 74.10-75.20 range.

In Feb, FII’S have net sold Rs 9454 cr in Equity segment and have net sold Rs 1202 cr of debt. In this financial year, FII’S have net sold Rs 42075 Cr worth of Indian Equities and have bought Rs 5306 Cr worth of Indian 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.

Global developments: USD regained against Euro. Oil gyrated and US Treasury yields fell back. Gold climbed. Uncertainty over Ukraine kept investors nervous and Global Equity markets remained nervous without decisive commitment on the downside.

Minutes from the January 25-26 Federal Open Market Committee (FOMC) meeting showed growing concern over elevated inflation.

Along with Ukraine uncertainty, pace of rate increase by Fed remains a matter of concern. Key Fed voting member called for aggressive rate hike, citing serious inflationary pressures. There is a growing expectation that Fed could hike rates by 50 bps in March meeting.

US income, spending data along with EU PMI(mfrg and services) data are key events in coming week.

Currency range : USDINR: 74.55/74.40/74.10( support), 75/75.25 (resistance), EURINR: 84.45/84.10 (support)/ 85.20 (Resistance), GBP/INR: 101-102.50, JPY/INR:63.50-65.50.

Suggestions: USD exports can be covered on spike above 75.25+. EURINR exports can be covered at around 85.20/85.55+. Payables can be covered at 84.40 and 84.10.  GBPINR exports can be covered at 102.50+


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