10/01/2020
Currency Map:
| Currency Pairs | WEEKLY CLOSE | PRIOR WEEK CLOSE | % change |
| USD/INR | 70.94 | 71.80 | -1.19 |
| EUR/INR | 78.67 | 80.10 | -1.78 |
| GBP/INR | 92.72 | 93.92 | -1.27 |
| JPY/INR | 64.82 | 66.42 | -2.40 |
Brent Crude closed at USD 65.86 VS prior week close of USD 69.77
Nifty closed at 12256 vs prior week close of 12226.
10 Year G-SEC Yield closed at 6.59%.
Major developments: It was a volatile trading week for USDINR. The pair traded in the 70.86-72.11 range. It closed at 70.94, registering a decline of 86 ps for USD. EURINR declined 1.78% and GBPINR declined 1.27%.
Rupee was rocked by Global tensions due to Cross fire between US and Iran. Rupee panicked to 72.11, tracking steep rally in Crude prices. However, as tensions eased, Rupee gained in more than equal measure, contributed by inflows related to Airtel QIP. The estimated inflows was around USD 3 bn. RBI did not absorb this and allowed Rupee to gain. Gains in EM pairs, notably CNY, may have also led to RBI allowing Rupee to gain. USDINR has now established a trading range of 70.50-72.
On macro-economic data, Indian IIP climbed 1.8% in Nov. Mfrg grew by 2.7%. Mining grew by 1.7%. Consumer durables declined by -1.5%, non-durables grew by 2% and Capital goods sector contracted -8.6%. CPI data is set for release on Monday.
FII’S nett bought Rs 1929 Cr of Indian Equities in Jan till date . FII’S have nett sold Rs 6467 Cr of Indian debt securities in Jan till date.
Global developments: Global markets shrugged off US-Iran tensions and regained prior week close comfortably. Crude and Gold declined sharply as US avoided an armed response to Iranian missile attack.
US and China are expected to sign the phase 1 trade deal in coming week. US economy added 145 k jobs in Dec and entered into 10 th year of consecutive economic expansion and job addition. US continues to lead the advanced economies in growth and is expected to maintain the normal trend growth in 2020.
Important developments in coming week: Indian CPI, US inflation data.
Currency range forecast for coming week:
USDINR: 70.50-71.30, EURINR: 78.70-79.50, GBPINR: 92-94, JPYINR: 64.50-66.50.
Suggestion: Cover 1 month USD import payables on decline to 70.60. USD receivables can be hedged at 71.80. 1 M EURINR payables can be hedged now at 78.70. EURINR receivables can be hedged closer to 80. GBPINR receivables hedging can be done on any rally to 94-95.
