FX – WEEKLY UPDATE :
FX Weekly Currency Score Week 23
Weekly SYNOPSIS: 31/05/2024
Thank you for reading this post, don't forget to subscribe!Currency Map:
|
Currency Pairs |
MONTH CLOSE |
APRIL CLOSE |
% change |
|
USD/INR |
83.42 |
83.42 |
0 |
|
EUR/INR |
90.12 |
89.34 |
0.87 |
|
GBP/INR |
105.92 |
104.64 |
1.22 |
|
JPY/INR |
53.08 |
53.25 |
-0.30 |
Brent Crude closed at USD 81.70 VS previous month close of USD 86. Gold closed at USD 2327. Nifty closed at 22530 vs prior month close of 22604. 10 Year G-SEC Yield is now at 7.01%.
Major developments: USDINR traded in the 83.03-83.54 range in May and closed at 83.42, unchanged for USD m/m. EUR climbed 0.87% m/m and GBP climbed 1.22 m/m against Rupee. Indian benchmark Equity declined 0.3% m/m. 10 Year G-SEC Yield closed at 7.01%. 1-year fwd premia is at 1.67% p.a.
Indian Q4 GDP climbed 7.8% in Q4 and GDP climbed 8.2% in 2023-24. In Q3, GDP climbed 8.3%. Mfrg climbed 9.9%, Mining grew by 7.4%, construction grew by 9.9% , Agri sector climbed 1.4% Private consumption climbed 4% and Govt consumption climbed 2.5%. Gross capital fixed formation climbed 9%.
Fiscal deficit improved to 5.63% as against budget estimate of 5.8% of GDP. GST collections climbed 10% y/y to Rs 1.73 lac Cr.
FX reserves stood at USD 646.6 bn, as on May 24 th. Reserves declined by USD 3.26 bn w/w.
In May till date, FPI’S have sold Rs 5433 Cr of Equities and bought Rs 2848 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.
Rupee showed some volatility on intra week basis as it swung between 83.24 and 83.50 range. RBI has till now controlled USDINR movement in a very tight range. It has absorbed FX inflows and stemmed Rupee gains in the past. With USD stagnating against majors, it is difficult to build a bearish narrative for Rupee. USDINR could trade in the broad 82.95-83.50 range in coming period.
Hedging advise: Imports be hedged on decline to 83.15/83.05. Exports be hedged in the 83.45/83.50 range.
Global developments: Rally in US Yields and inflation jitters weighed down on asset markets and pulled down crosses. Hawkish comments from Fed members also contributed to paring down of rate cut expectations.
US GDP climbed 1.3% annualized in Q1 as against estimate of 1.6%, dragged by personal spending which climbed only 2% as against expectation of 2.6%.Higher rates and slower income growth are contributing to drag in personal spending. Annually, PCE price index was unchanged at 2.7% yoy. Core PCE price index was unchanged at 2.8% yoy. Both matched expectations.
Personal income rose 0.3% mom or USD 65.3B, matched expectations. Personal spending rose 0.2% mom or USD 39.1B, below expectation of 0.3% mom.
EU CPI accelerated.
ECB meeting, US nonfarm payrolls and ISM (mfrg) data will be focus events for the week.
Currency technical levels: USDINR: 83.05 (Supports), 83.55 (resistance),
EURINR:90.90(Resistance),89.
GBPINR: Supports: 105.30/103.90( supports), Resistance:106.35(Resistance).
JPYINR: Resistance:54.85, Supports: 52.10 (support).
Hedging advise: USDINR imports be hedged on decline to 83.15/83.05 . EUR nearby receivables be covered in the 90.50-90.90 zone. GBP receivables can be covered at 106+.
Click to open an Account : https://ekyc.gwcindia.in/client/