FX – MORNING UPDATE :
FX Morning Update USD INR May 6, 2024
USDINR opened at 83.38 on Friday and the pair traded in the 83.35-83.45 range. Spot USDINR closed at 83.45, loss of 2 ps for USD as against prior close of 83.47.
Thank you for reading this post, don't forget to subscribe!RBI reference rate was fixed at 83.38 on 03/05. May USD/INR closed at 83.53, unchanged for USD as compared to prior day’s close of 83.53. May Euro/INR closed at 89.57, 3BP/INR at 104.56 and Yen/INR at 54.40. 1 year USDINR fwd premia was trading at around 1.69% p.a. FX reserves stood at USD 638 bn, as on April 26 th. Reserves decreased by USD 2.4 bn w/w.
|
PAIRS |
RBI REF RATE (03/05) |
|
USDINR |
83.38 |
|
EURINR |
89.50 |
|
GBPINR |
104.61 |
|
JPYINR |
54.50 |
In May till date, FPI’S have sold Rs 695 Cr of Equities and sold Rs 1458 Cr of debt . In FY 23-24, FII’S have net bought Rs 206279 Cr of Equities and have net bought Rs 123120 Cr of debt.
Benchmark Nifty declined 172 points (0.76%) on Friday. US S&P climbed 63 points (1.26%) y’day. Nikkei is flat and Hang Seng is up 0.23% today.
Euro is now at 1.0766, Pound at 1.2549, Yen at 153.78.
Commodities: Gold is now at USD 2311 and WT1Crude at USD 78/Brent at USD 83.
Interest rates: USD 10 Yr yield is at 4.50% and 3 m libor closed at 5.59%. Indian 10 yr benchmark yield closed at 7.15%.
Economic news: US Non-Farm Payroll employment grew 175k in April, well below expectation of 243k. It’s also way lower than the average gain of 242k in the prior 12 months.Unemployment rate rose from 3.8% to 3.9%, above expectation of 3.8%. Labor force participation rate was unchanged at 62.7%. Average hourly earnings rose 0.2% mom, 3.9% yoy, below expectation of 0.3% mom, 4.0% yoy.
USD declined as hopes for two rate cuts later this year reemerge. Fed Chairman sounded less hawkish than feared. He explicitly dismissed the possibility of further rate hikes, stating that the next move by the Fed would likely involve “cutting” or “not cutting” rates, rather than increasing them. This clarification has helped alleviate investor anxieties about more monetary tightening.
US 10-year yield’s steep pull back on Friday confirmed short term topping at 4.730.
BOJ intervened to sell USD as USD/JPY hit 161. Yen has gained to 153.
Data highlights: – US ISM(services) contracted to 49.4.
-EU unemployment rate was at 6.5%.
Monday’s calendar : – EU PMI(services-final) and sentix investor confidence
|
USD/INR |
|
83.45 |
83.35 |
|
|
EUR/USD |
1.0766 |
1.0812 |
1.0724 |
|
|
GBP/USD |
1.2549 |
1.2635 |
1.2530 |
|
|
USD/JPY |
153.78 |
153.80 |
151.86 |
Daily Support/Resistance table
|
Currency Pairs |
Pivot |
R1 |
R2 |
R3 |
S1 |
S2 |
S3 |
|
EURO/USD |
1.0767 |
1.0810 |
1.0855 |
|
1.0722 |
1.0679 |
|
|
GBP/USD |
1.2571 |
1.2612 |
1.2676 |
|
1.2507 |
1.2466 |
|
|
USD/JPY |
153.14 |
154.43 |
155.08 |
|
152.48 |
151.20 |
|
|
USD/INR |
83.41 |
83.48 |
83.52 |
|
83.37 |
83.30 |
|
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
|
Currency Pair |
Supports |
Resistances |
Trend |
Remarks |
|
EURO/USD |
1.06/1.0520 |
1.08/1.0840 |
DN |
UP>1.0845 |
|
GBP/USD |
1.23/1.2220 |
1.2540/1.2620 |
DN |
UP>1.2620 |
|
USD/JPY |
154.80/152 |
159 |
UP |
SIDE<152 |
|
USD/INR |
83.27/83.17/83.10 |
83.47/83.70 |
UP |
SIDE<83.17 |
|
USD/CHF |
0.8950/0.8830 |
0.9230 |
UP |
SIDE<0.8950 |
Technicals: Spot closed above major moving averages.20 day moving average is at 83.42. 50 day moving average is at 83.15. 200 day moving average is at 82.97. Daily MACD is in sell zone. Important support is at 83.27/83.17/83.10 and important resistance is at 83.47/83.70. Spot closed above the average level of the day.
Intraday supports and resistances for May contract are:
PP: 83.50, S1:83.45, S2:83.36, R1:83.58, R2:83.64.
Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.
However on directional basis, suggest the following:
USD imports be hedged on decline to 83.27/83.17/83.10.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is below major moving averages. Major resistance is at 1.08/1.0845. Next major support is at 1.06/1.0520/1.0450. Daily MACD is in buy zone, implying an important bottom at 1.06. Weekly MACD is in sell zone, implying important top at 1.1140.
GBP/USD: The pair is below major moving averages. Daily MACD is in buy zone, implying important bottom at 1.23 and weekly MACD is in sell zone, implying important top at 1.2895. Important support is at 1.23/1.2230. Important resistance is at 1.2630.
USD/YEN: The pair is above major moving averages. Daily MACD is in sell zone, implying important top at 160. Important resistance is at 160 and support is at 151.85/149.
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