Currency Map:

USD/INR 74.39 74.25  0.18
EUR/INR 86.86 87.23 -0.42
GBP/INR 101.30 102.49 -1.16
JPY/INR 67.85 67.32 0.78

Brent Crude closed at USD 65 VS prior week close of USD 70.25. Gold closed at USD 1782.Nifty closed at 16450 vs prior week close of 16529. 10 Year G-SEC Yield closed at 6.23%.

Major developments: USDINR traded in the 74.21-74.48 range and closed at 74.39 as against prior week close of 74.25. Rupee declined 0.18% w/w. EUR declined 0.42% and GBP declined 1.16% w/w against Rupee. Indian benchmark Equity index climbed 0.47% w/w. 10 Year G-SEC Yield closed at 6.23%. 1 year fwd premia is at 4.25% p.a. Forex reserves is at USD 619 bn. In August, till date,, In August, till date,, FII’S have net bought Rs 7558 cr in Equity segment and have net bought Rs 646 cr of debt. In this financial year, FII’S have net bought Rs 543 Cr worth of Indian Equities and have sold Rs 4163 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.

Indian Equity indices corrected mildly from its historic highs. There were no major data releases. USDINR could trade in the 74.05-74.60 range.                   

Global developments: Commodities melted on worries over impact of Delta variant of covid, Fed’s hint of QE tapering and cut in Chinese steel output. USD gained and Equity markets corrected mildly. Fed Chairman Powell reiterated that the recovery in the labor market is far from complete and said that it wasn’t clear how a big an impact the Delta variant will have on the economy. Fed Chief will be speaking at Jackson hole symposium and may give further insights on recent developments and Fed’s thinking on QE taper.

US Consumers have started to spend more on services and this was reflected in below par retail sales. The silver lining is that the service sector could normalise employment conditions and the recovery will be more even.                                                    

But even as things started to brighten, consumer confidence deteriorated due to surging infections. This poses downside risks to economy at a time when the consumers are expected to come out and spend on goods and services.

US retail sales dropped -1.1% mom in July to USD 61.7B, worse than expectation of -0.2% mom. Ex-auto sales dropped -0.4% mom, below expectation of 0.1% mom.

Eurozone GDP grew 2.0% qoq in Q2.

Japanese GDP grew 0.3% qoq in Q2, above expectation of 0.2% qoq. The economy was back in growth 

after -1.0% qoq contraction in Q1. In annualized term, GDP grew 1.3%, above expectation of 0.7%.

US data on spending and income, inflation indicator are other important data events for the week.

Currency range forecast: USDINR:74.05/73.90 (support)-74.57(Resistance), EURINR: 86.35(support), 

88(Resistance), GBPINR: 101.40/100.40.(support), 102.50- Resistance, JPYINR: 66-68.50.                         

Suggestion: Cover USD import payables. Receivables can be covered later. EURINR receivables can be 

hedged closer to 87.50/88.. GBPINR receivables hedging can be done at around 102.50-103.

For all your investment needs feel free to reach us. Give us a missed call at 90037 90027. For Support : 044-40329999.

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