FX – MORNING UPDATE :
FX Morning Update USD INR May 24, 2024
USDINR opened at 83.31 on Wednesday and the pair traded in the 83.22-83.31 range. Spot USDINR closed at 83.29, loss of 3 ps for USD as against prior close of 83.32. FX market was closed y’day for Buddha Poornima.
Thank you for reading this post, don't forget to subscribe!RBI reference rate was fixed at 83.23 on 22/05. May USD/INR closed at 83.31, loss of 3 ps for USD as compared to prior day’s close of 83.34. May Euro/INR closed at 90.20, GBP/INR at 105.94 and Yen/INR at 53.51. 1 year USDINR fwd premia was trading at around 1.69% p.a. FX reserves stood at USD 644.15 bn, as on May 10 th. Reserves increased by USD 2.56 bn w/w.
|
PAIRS |
RBI REF RATE (22/05) |
|
USDINR |
83.23 |
|
EURINR |
90.39 |
|
GBPINR |
106.55 |
|
JPYINR |
53.21 |
In May till date, FPI’S have sold Rs 30092 Cr of Equities and bought Rs 446 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 370 points y’day (1.64%). US S&P declined 40 points (0.74%) y’day. Nikkei climbed 1.28% and Hang Seng declined 1.7% y’day.
Euro is now at 1.0808, Pound at 1.2692, Yen at 157.08.
Commodities: Gold is now at USD 2330 and WT1Crude at USD 77/Brent at USD 81.30.
Interest rates: USD 10 Yr yield is at 4.47% and 3 m libor closed at 5.59%. Indian 10 yr benchmark yield closed at 7.04%.
Economic news: Equity markets soared as RBI paid Rs 2.1 lac cr as dividend to Govt. This is expected to reduce Govt’s fiscal deficit. Dividend payout could be used to boost capital expenditure in coming budget. Govt may also trim fiscal deficit and that could help to get better rating. Yield is likely to go down and is akin to a rate cut by RBI.
FOMC minutes was hawkish as many members felt that rate could be supported in inflation remains stubborn. FOMC minutes highlighted recent monthly data showing “significant increases in components of both goods and services price inflation,” adding to the urgency of the situation. More importantly, “various participants mentioned a willingness to tighten policy further should risks to inflation materialize in a way that such an action became appropriate.”
Despite the hawkish tone of the minutes, it’s important to note that several influential figures, including Chair Jerome Powell and Governor Christopher Waller, have since indicated that they doubt whether the next move will be a rate hike.
S&P Global Flash US PMI Composite Output Index rose sharply from 51.3 in April to 54.4 in May, with the report also highlighting that “the rate of inflation accelerating to register the second-largest monthly increase seen over the past eight months.”
Fresh fears that a underlying strength in the economy could spark a revival inflation, cooled investor expectations for rate cuts just a day after the Fed’s May meeting minutes showed members were concerned about stalling disinflation.
Data highlights: – – US existing home sales dipped to 4.14 mn, weekly jobless claims dipped to 215k and new home sales declined to 634k.
-EU PMI(mfrg-flash) remained in contraction mode at 47.4 and PMI(flash-services) was at expansion mode at 53.3 and consumer confidence was reported at -14.
-UK PMI(mfrg) improved to 51.3 and PMI(services) declined to 52.9.
-UK CPI climbed 2.3% y/y, RPI climbed 3.3% y/y and PPI(output) climbed 0.2% m/m.
Wednesday’s calendar : -US durables order
-UK retail sales
|
USD/INR |
|
83.31 |
83.22 |
|
|
EUR/USD |
1.0808 |
1.0862 |
1.0805 |
|
|
GBP/USD |
1.2692 |
1.2748 |
1.2684 |
|
|
USD/JPY |
157.08 |
157.20 |
156.53 |
Daily Support/Resistance table
|
Currency Pairs |
Pivot |
R1 |
R2 |
R3 |
S1 |
S2 |
S3 |
|
EURO/USD |
1.0827 |
1.0849 |
1.0884 |
1.0907 |
1.0792 |
1.0770 |
1.0735 |
|
GBP/USD |
1.2710 |
1.2736 |
1.2774 |
1.2800 |
1.2672 |
1.2646 |
1.2608 |
|
USD/JPY |
156.89 |
157.25 |
157.56 |
157.92 |
156.58 |
156.22 |
155.91 |
|
USD/INR |
83.27 |
83.32 |
83.36 |
|
83.23 |
83.18 |
|
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
|
Currency Pair |
Supports |
Resistances |
Trend |
Remarks |
|
EURO/USD |
1.0810/1.0735 |
1.0885 |
UP |
DN<1.0735 |
|
GBP/USD |
1.2635/1.2535 |
1.2825 |
UP |
DN<1.2535 |
|
USD/JPY |
152 |
157/160 |
UP |
SIDE<152 |
|
USD/INR |
83.25/83.17/83.10 |
83.70 |
SIDE |
UP>83.55 |
|
USD/CHF |
0.90/0.8885 |
0.9230 |
UP |
SIDE<0.90 |
Technicals: Spot closed above 50 and 200 day moving averages.20 day moving average is at 83.43. 50 day moving average is at 83.29. 200 day moving average is at 83.10. Daily MACD is in sell zone. Important support is at 83.22/83.17/83.10 and important resistance is at 83.54/83.70. Spot closed above the average level of the day.
Intraday supports and resistances for May contract are:
PP: 83.285, S1:83.25, S2:83.19, R1:83.34, R2:83.37.
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 83.25.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is above major moving averages. Major resistance is at 1.0885. Next major support is at 1.0810/1.0735. 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 above 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 1.2535. Important resistance is at 1.2710/1.2825.
USD/YEN: The pair is above major moving averages. Daily MACD is in sell zone, implying important top at 160. Important resistance is at 157/ 160 and support is at 151.85/149.
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