Currency Map:

USD/INR 74.83 75.02 -0.25
EUR/INR 86.85 85.50 1.57
GBP/INR 95.26 94.08 1.25
JPY/INR 70.45 70 0.64

Brent Crude closed at USD 43.34VS prior week close of USD 43.12.

Nifty closed at 11194 vs prior week close of 10902.

10 Year G-SEC Yield closed at 5.81%.

Major developments:USDINR traded in the 74.58-75.03 range and closed at 74.83, gain of 0.25% for Rupee w/w. EUR gained 1.57%, while GBP climbed 1.25%against Rupee. Indian Equity markets climbed 2.67% w/w basis. 10 Year G-SEC Yield closed at 5.81%.

Rupee gained as inflows gathered pace. Reliance led the way in FDI investment. Reliance retail is planning to sell 9.9% stake in its retail business to Amazon. Better than expected corporate results and pickup in demand for 2 wheelers also added to bullish sentiment. Liquidity is driving both Rupee and Equity indices higher. Corona infection curve steepened further both nationally and globally. India has started testing Corona vaccine on humans and is expected to complete its trial in 3 months.

FII’S have nett bought Rs 2165 sold Cr ofIndian Equities in July . FII’S have nett sold Rs 1383 Cr of Indian debt securities in July. In FY 19-20, FII’s have sold Rs 10200 Cr of Equities and 47393 cr of debt.

Expect USDINR to trade in the 74.50-75.50 zone.

Global developments:Euro and Gold climbed steeply even as Equities oscillated. Gold benefitted from US-China issues. Euro soared as EU leaders agreed on post pandemic fund of EURO 750 bn.US Congress is debating on extending income support as the previous scheme comes to a close shortly. With most US states reporting climbing infections, re-imposition of lock down or partial lock down is becoming a norm.

Fed is set to deliberate on the next steps of its policy response at its scheduled meeting next week. US stimulus and Fed’s response will hopefully lift the stalled recovery.

EU and UK manufacturing surveys holds promise of recovery and the economies have started this quarter on a strong footing.

Important developments in coming week:Fed meeting.

Currency range forecast:USDINR:74.50(support)-75.50(Resistance),EURINR: 84(support)-88(Resistance), GBPINR: 93.50(support)-97(Resistance), JPYINR: 69-71.50.

Suggestion: Cover USD import payables on decline to 74.50.USD receivables can be hedged at 75.25+.1 M EURINR payables can be hedged at 85.50. EURINR receivables hedging can be considered partially at 88. GBPINR receivables hedging can be part done at 97.

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