Currency Map:

USD/INR 76.29 76.19 0.13
EUR/INR 82.94 82.41 0.64
GBP/INR 95.15 93.48 1.78
JPY/INR 70.32 70.24 0.11


Brent Crude closed at USD 28.80VS prior week close of USD 30.55.

Nifty closed at 9111 vs prior week close of 8083.

10 Year G-SEC Yield closed at 6.49%.

Major developments:It was a truncated trading week. USDINR traded in the 75.57-76.55 range and closed at 76.29. EUR and GBP climbed against Rupee. Indian Equity markets climbed over 12% w/w basis.

Focus was on the progress of corona virus and its economic fallout with hopes on new policies to alleviate the economic suffering. India is in the midst of a 21 day lock down, which may be extended by another 14 days. Corona virus has upended the incipient industrial recovery that was underway in Feb. IIP climbed 4.5%, mining grew by 10% and manufacturing climbed 3.2% in Feb. CPI data is set for release on Monday.

FII’S continued to be nett sellers in debt papers.FII’S nett bought Rs 850 Cr ofIndian Equities in April . FII’S have nett sold Rs 4319 Cr of Indian debt securities in April.

Global USD funding has improved as evident from drop in EURUSD fwd premia. USD liquidity will stem bigger decline in Rupee. RBI has sold USD 16.8 bn and they may intervene again if Rupee breaches 77. Long term technical view indicates possibility of Rupee heading to 77-78/80 levels with support at 74.40.

Global developments:COVID-19 dominated economic and market mood. Cases continued to surge. However, there are reports that curve is flattening in Europe and may peak in US in next two weeks. Economic data is down beat. US jobless claims have crossed 12 mn in last two weeks.                                                                                        

In the midst of depressing economic outlook, Equity markets surged 12% w/w, based on the hopes of an early end to the virus. Oil declined as markets remains sceptical on production cut of 10 million barrels per day. Demand has declined by 30 million barrels per day. Fed’s USD 2.3 trn monetary stimulus and EU’S 590 bnEur and Japanese measures are keeping the markets afloat. Gold continues to benefit from the Global crisis and rate cuts. Gold has surged past USD 1750.

Important developments in coming week: News on corona virus.

Currency range forecast for coming week:

USDINR:74.40(support), EURINR: 82.25(support), GBPINR: 91.75/90(support), JPYINR: 66.50-71.

Suggestion: Cover USD import payables. USD receivables can be hedged later.1 M EURINR payables can be hedged at 82.25/81.50. EURINR receivables can be hedged closer to 84. GBPINR receivables hedging can be done on any rally to 95.




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