Currency Map:

USD/INR 74.44 74.45 0
EUR/INR 85.22 86.37 -1.33
GBP/INR 99.56 101.65 -2.05
JPY/INR 65.18 65.49 -0.47

Brent Crude closed at USD 82.45 VS prior week close of USD 83. Gold closed at USD 1867.Nifty closed at 18102 vs prior week close of 17916. 10 Year G-SEC Yield closed at 6.37%.

Major developments: USDINR traded in the 73.85-74.58 range and closed at 74.44 as against prior week close of 75.45. Rupee closed flat w/w. EUR declined 1.33% and GBP declined 2.05% w/w against Rupee. Indian benchmark Equity index climbed 1.03% w/w. 10 Year G-SEC Yield closed at 6.37%. 1 year fwd premia is at 4.60% p.a.

USDINR declined to 73.85 early last week due to PAYTM IPO inflows. However, USDINR regained its losses partly due to refund of Nykaa IPO Oversubscription. USD strength against majors is a major negative for Rupee. However, with IPO inflows likely to remain robust, the pair could swing on both sides of 74.50. IIP and CPI data awaited.

Technically, USDINR has strong support at 73.85. Support is at 74.25/74.10 . Major resistance is at 75.60. USDINR could swing between 74 and 75.60.

Indian Yields also regained to 6.37% despite cut in fuel prices.

Global developments: Strong US CPI data sent USD on a rally mode against major Currencies as market is now expecting rate hike in June 2022. Fed announced QE tapering of USD 15 bn from Nov. US consumer inflation was the biggest, and lasting, market driver last week, as CPI surged to 6.2% yoy in October. That’s the highest level in over three decades, and the fifth straight month of reading above 5%. 

EUR/USD declined to 1.1425 and GBP also declined below the crucial 1.34 levels.

Focus is on US retail sales data.                                                                                          

Currency range forecast: USDINR: 73.90(support)-74.70/75.65(Resistance), EURINR: 83.80(support), 86.70(Resistance), GBPINR: 98(support), 101.50/102.30- Resistance, JPYINR: 64-66.   

Suggestion: Cover USD import payables on dips to 74.25/74.10. Receivables can be monitored and hedging can be initiated at 75.50+. EURINR receivables can be hedged closer to 86.50+. GBPINR receivables hedging can be done at around 101.50+

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