WEEKLY SYNOPSIS: 15/01/2021
|Currency Pairs||WEEKLY CLOSE||PRIOR WEEK CLOSE||% change|
Brent Crude closed at USD 54.85 VS prior week close of USD 56.22. Gold closed at USD 1827.Nifty closed at 14433 vs prior week close of 14347.10 Year G-SEC Yield closed at 5.98%.
Major developments: USDINR traded in the 72.95-73.50 range and closed at 73.07as against prior week close of 73.24, nominal Rupee gain of 0.23% w/w. EUR declined 1% and GBP climbed 0.23% against Rupee. Indian benchmark Equity index gained 0.6% w/w. 10 Year G-SEC Yield closed at 5.98%.
Rupee gained to 72.95 early last week, as flows continued.Fwdpremia surged higher on increasing G-sec yields. 1 Year fwdpremia climbed to 4.6% p.a. Rupee gained despite reversal in USD direction against Euro. Higher Oil prices and increasing trade deficit failed to dent Rupee gains.Indian exports bounced back in Dec to clock USD 27.2 bn. Imports grew 7.6% to USD 42.6 bn. Imports growth reflects pickup in economic activity. BSE sensex is close to 50k level. IT companies have upped their future guidance after robust results. Indian vaccination programme was kicked off, inspiring confidence to public.
FII’S nett bought Rs 17873 Cr ofIndian Equities in Jan . FII’S nett sold Rs 3146 Cr of Indian debt securities in Jan . In this financial year, FII’S have nett bought Rs 229666 Cr of Equities and have sold Rs 24935 Cr in debt. In FY 19-20, FII’s sold Rs 10200 Cr of Equities and 47393 cr of debt.
Global developments:US President elect unveiled USD 1.9 trn package to support household income and vaccination efforts. Higher fiscal stimulus weighed on USD and Equity markets. In US, sooner-than-anticipated rate hikes or asset purchase tapering has recently risen to the fore alongside vaccine deployment, additional fiscal relief and overall brighter prospects for economic growth. Several Fed officials pushed back on that notion this week.
US economic data was soft. Weekly jobless claims surged and retail sales declined. Even as vaccination efforts are progressing sluggishly in US and EU, many new variants are threatening return to normal life.Many European countries continue to be on a second lockdown, and restrictions continue to mount on those that are not on lockdown.
ECB and BOJ meetings are the focus events for this week.
Technically,US could rebound as momentum of fall is waning.
Currency range forecast: USDINR:72.90(support)-73.50(Resistance), EURINR: 87.50(support), 89.50 (Resistance), GBPINR: 97(support) 100.20/101.20- Resistance, JPYINR: 70-72.
Suggestion: Cover USD import payables on decline to 73.05/72.90. USD receivables can be hedged at 73.65.EURINR payables can be hedged on decline to 87.50. GBPINR receivables hedging can be done.
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