FX – MORNING UPDATE
FX Morning Update USD INR July 1, 2024
USDINR opened at 83.41 on Friday and the pair traded in the 83.36-83.49 range. Spot USDINR closed at 83.38, loss of 7 ps for USD as against prior close of 83.45.
Thank you for reading this post, don't forget to subscribe!RBI reference rate was fixed at 83.45 on 28/06. July USD/INR closed at 83.45, loss of 8 ps for USD as compared to prior day’s close of 83.53. July Euro/INR closed at 89.46, GBP/INR at 105.58 and Yen/INR at 52.55. 1 year USDINR fwd premia was trading at around 1.63% p.a. FX reserves stood at USD 653.71 bn, as on June 21 st. Reserves climbed by US D 816 mn w/w.
|
PAIRS |
RBI REF RATE (28/06) |
|
USDINR |
83.45 |
|
EURINR |
89.25 |
|
GBPINR |
105.46 |
|
JPYINR |
51.86 |
In June , FPI’S have bought Rs 24386 Cr of Equities and bought Rs 15616 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 34 points (0.14%) on Friday. US S&P declined 22 points (0.41%). Nikkei is up 0.2% and Hang Seng is trading flat today.
Euro is now at 1.0713, Pound at 1.2642, Yen at 160.83.
Commodities: Gold is now at USD 2326 and WT1Crude at USD 81.50/Brent at USD 85.
Interest rates: USD 10 Yr yield is at 4.39% and 3 m libor closed at 5.59%. Indian 10 yr benchmark yield closed at 6.99%.
Economic news: Core sector climbed 6.2% in April after growing at 6% in March. Rupee gained as JP Morgan started its initiation of Indian bonds in its index. This could attract USD 25 bn inflows over 1 year period. It has the potential to stabilize FX movement, lower borrowing costs by pushing yields lower. Bank funds could be released for lending purposes which could spur growth. Indian Equities continued its stellar run as President outlined the economic approach of the new Govt. Govt is expected to announce major social and economic growth boosting measures in its budget on July 22 nd.
In May, US PCE price index was flat mom, matched expectations. PCE core price index (excluding food and energy) rose 0.1% mom. Both matched expectations. From the same month one year ago, headline PCE price index slowed from 2.7% yoy to 2.6% yoy. PCE core price index slowed from 2.8% yoy to 2.6% yoy. Both matched expectations.
Fed member elaborated on the unique challenges facing the US economy, emphasizing that monetary policy operates with “long and variable lags.” He suggested that these lags might be longer than expected due to factors such as labor hoarding, excess savings, delayed exposure to interest rate hikes, and newfound pricing power among businesses.Furthermore, he raised the possibility that the Fed’s rate hikes might not be constraining the economy as much as anticipated.
Focus is on US ISM, EU, UK PMI data.
Data highlights: – US Weekly jobless claims dipped to 233k, durables order climbed 0.1% m/m and pending home sales declined -2.1% m/m.
-US Personal income climbed 0.5% m/m snd spending climbed 0.2% m/m. Core PCE index climbed 0.1% m/m as expected.
Monday’s calendar : – US ISM(mfrg) and construction spending
-EU PMI(mfrg-final)
-UK PMI(mfrg-final)
|
USD/INR |
|
83.49 |
83.36 |
|
|
EUR/USD |
1.0713 |
1.0726 |
1.0684 |
|
|
GBP/USD |
1.2642 |
1.2665 |
1.2619 |
|
|
USD/JPY |
160.83 |
161.28 |
160.26 |
Daily Support/Resistance table
|
Currency Pairs |
Pivot |
R1 |
R2 |
R3 |
S1 |
S2 |
S3 |
|
EURO/USD |
1.0707 |
1.0731 |
1.0749 |
|
1.07 |
1.0665 |
|
|
USD/JPY |
160.79 |
161.32 |
161.81 |
|
160.30 |
159.77 |
|
|
GBP/USD |
1.2642 |
1.2665 |
1.2688 |
|
1.2619 |
1.2688 |
|
|
USD/INR |
83.41 |
83.46 |
83.54 |
|
83.33 |
83.28 |
|
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
|
Currency Pair |
Supports |
Resistances |
Trend |
Remarks |
|
EURO/USD |
1.0610 |
1.0765/1.09 |
DN |
UP>1.09 |
|
GBP/USD |
1.2535 |
1.2740/1.2825 |
UP |
DN<1.2535 |
|
USD/JPY |
158.80 |
162 |
UP |
SIDE<158.80 |
|
USD/INR |
83.34 |
83.70 |
UP |
SIDE<83.30 |
|
USD/CHF |
0.8825/0.8730 |
0.9035 |
DN |
UP>0.9035 |
Technicals: Spot closed above 50 and 200 day moving averages.20 day moving average is at 83.49. 50 day moving average is at 83.44. 200 day moving average is at 83.21. Daily MACD is in sell zone. Important support is at 83.34 and important resistance is at 83.70. Spot closed below the average level of the day.
Intraday supports and resistances for July contract are:
PP: 83.48, S1:83.53, S2:83.61, R1:83.40, R2:83.35.
Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.
However on directional basis, suggest the following:
USD exports be hedged at 83.60+.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is below major moving averages. Major resistance is at 1.0790/1.09. Next major support is at 1.0610. Daily MACD is in sell zone, implying an important top at 1.09. Weekly MACD is in sell zone, implying important top at 1.1140.
GBP/USD: The pair is between major moving averages. Daily MACD is in sell zone, implying important top at 1.2825 and weekly MACD is in sell zone, implying important top at 1.2825. Important support is at 1.2535. Important resistance is at 1.2740/1.2825.
USD/YEN: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 154.55. Important resistance is at 162 and support is at 158.80.
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