FX – MORNING UPDATE :
USDINR opened at 83.93 Y’day and the pair traded in the 83.93-83.95 range. Spot USDINR closed at 83.93, gain of 1 ps for USD as against prior close of 83.92.
RBI reference rate was fixed at 83.96 on 22/08. Aug USD/INR closed at 83.96, gain of 2 ps for USD as compared to prior day’s close of 83.94. Aug Euro/INR closed at 93.40, GBP/INR at 109.90 and Yen/INR at 57.39. 1 year USDINR fwd premia was trading at around 2.08% p.a. FX reserves stood at USD 670 bn, as on Aug 9 th. Reserves declined by US D 4.7 bn w/w.
|
PAIRS |
RBI REF RATE (22/08) |
|
USDINR |
83.96 |
|
EURINR |
93.58 |
|
GBPINR |
109.93 |
|
JPYINR |
57.79 |
In Aug , FPI’S have sold Rs 18347 Cr of Equities and bought Rs 7404 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 climbed 41 points (0.17%) y’day. US S&P climbed 24 points (0.42%) y’day. Nikkei climbed 0.67% and Hang Seng climbed 1.44% y’day.
Euro is now at 1.1124, Pound at 1.3102, Yen at 145.65.
Commodities: Gold is now at USD 2488 and WT1Crude at USD 73/Brent at USD 77.
Interest rates: USD 10 Yr yield is at 3.84% and 3 m libor closed at 5.37%. Indian 10 yr benchmark yield closed at 6.97%.
Economic news: ECB’s July minutes revealed that the upcoming September meeting is “widely seen as a good time to re-evaluate the level of monetary policy restriction,” with members emphasizing the importance of approaching that meeting with an “open mind.”
The data-dependent approach was reiterated, but with a clear message that this does not mean overemphasizing specific, single data points. Instead, the policy decisions should be guided by established elements of the reaction function.
UK’s PMI data for August showed positive momentum across both the manufacturing and services sectors. PMI Manufacturing edged up from 52.1 to 52.5, surpassing expectations of 52.2 and marking a 26-month high. PMI Services also rose from 52.5 to 53.3, above the expected 52.8. This led to PMI Composite increase from 52.8 to 53.4.
Chief Business Economist at S&P Global Market Intelligence, highlighted the significance of these figures, noting that “August is witnessing a welcome combination of stronger economic growth, improved job creation, and lower inflation.” He emphasized that both manufacturing and service sectors are showing solid output growth and increased job gains, with business confidence remaining historically high.
Eurozone PMI Manufacturing fell slightly from 45.8 to 45.6 in August, an 8-month low and below expectations of 46.1. In contrast, PMI Services showed a strong performance, rising from 51.9 to 53.3, surpassing the expected 52.2. This divergence led to a modest increase in PMI Composite, which climbed from 50.2 to 51.2, signaling faster expansion.
Data highlights: – US Weekly jobless claims was at 232k, and existing home sales was reported at 3.95 mn.
-EU PMI(mfrg) declined to 45.6 and PMI(services) climbed to 53.3.
– EU consumer confidence was in line with consensus at -13
-UK PMI(mfrg) climbed to 52.1 and PMI(services) climbed to 53.3.
Friday’s calendar : – US new home sales
|
USD/INR |
|
83.95 |
83.93 |
|
|
EUR/USD |
1.1122 |
1.1166 |
1.1097 |
|
|
GBP/USD |
1.3102 |
1.3131 |
1.3075 |
|
|
USD/JPY |
145.65 |
146.55 |
144.85 |
Daily Support/Resistance table
|
Currency Pairs |
Pivot |
R1 |
R2 |
R3 |
S1 |
S2 |
S3 |
|
EURO/USD |
1.1125 |
1.1153 |
1.1194 |
1.1222 |
1.1084 |
1.1056 |
1.1015 |
|
USD/JPY |
145.89 |
146.93 |
147.59 |
148.63 |
145.23 |
144.19 |
143.53 |
|
GBP/USD |
1.3098 |
1.3121 |
1.3154 |
1.3177 |
1.3065 |
1.3042 |
1.3009 |
|
USD/INR |
83.94 |
83.95 |
83.96 |
|
83.93 |
83.92 |
|
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
|
Currency Pair |
Supports |
Resistances |
Trend |
Remarks |
|
EURO/USD |
1.0950/1.0850 |
1.12 |
UP |
DN<1.0950 |
|
GBP/USD |
1.2650 |
1.32 |
SIDE |
DN<1.2650 |
|
USD/JPY |
145.70/142 |
149/152 |
DN |
SIDE>149 |
|
USD/INR |
83.76/83.65 |
84.10/84.25 |
UP |
SIDE<83.76 |
|
USD/CHF |
0.8575/0.84 |
0.8730 |
DN |
SIDE>0.8730 |
Technicals: Spot closed above 50 and 200 day moving averages.20 day moving average is at 83.86. 50 day moving average is at 83.67. 200 day moving average is at 83.32. Daily MACD is in sell zone. Important support is at 83.75/83.65 and important resistance is at 84.10. Spot closed below the average level of the day.
Intraday supports and resistances for Aug contract are:
PP: 83.96, S1:83.94, S2:83.92, R1:83.98, R2:84.
Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.
However on directional basis, suggest the following:
USD exports be hedged above 84+.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is above major moving averages. Major resistance is at 1.12. Next major support is at 1.0950/1.0850. Daily MACD is in buy zone, implying an important bottom at 1.0775. Weekly MACD is in buy zone, implying important bottom at 1.06.
GBP/USD: The pair is above moving averages. Daily MACD is in buy zone, implying important bottom at 1.2650 and weekly MACD is in buy zone, implying important bottom at 1.23. Important support is at 1.2650. Important resistance is at1.32.
USD/YEN: The pair is below major averages. Daily MACD is in sell zone, implying important top at 162. Important resistance is at 149/152 and support is at 145.70/142.
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