FX – MORNING UPDATE :
FX Morning Update USD INR September 1, 2023
USDINR opened at 82.64 y’day and the pair traded in the 82.57-82.77 range. Spot USDINR closed at 82.77, gain of 5 ps for USD as against prior close of 82.72. Rupee declined 52 ps and closed at 82.77 on Aug end as compared to 82.25 in July.
RBI reference rate was fixed at 82.67 on 31/08. Sep USD/INR closed at 82.82, gain of 2 ps for USD as compared to prior day’s close of 82.80. Sep Euro/INR closed at 90.08, GBP/INR at 104.89 and Yen/INR at 57.05. 1 year USDINR fwd premia was trading at around 1.63% p.a. FX reserves stood at USD 594 bn as on Aug 18 th. FX reserves declined by USD 8 bn.
| PAIRS | RBI REF RATE (31/08) |
| USDINR | 82.67 |
| EURINR | 90.22 |
| GBPINR | 105.09 |
| JPYINR | 56.63 |
In Aug, FPI’S have bought Rs 11464 Cr of Equities and bought Rs 5692 Cr of debt . In 2022-23 fiscal year, FII’S have net sold Rs 27593 Cr of Equities and have net bought Rs 838 Cr of debt.
Benchmark Nifty declined 63 points (0.32%) y’day. US S&P declined 7 points (0.16%) . Nikkei climbed 0.38% and Hang Seng climbed 0.07%.
Euro is now at 1.0849, Pound at 1.2673, Yen at 145.38.
Commodities: Gold is now at USD 1967 and WT1Crude at USD 84/Brent at USD 87.
Interest rates: USD 10 Yr yield is at 4.11% and 3 m libor closed at 5.65%. Indian 10 yr benchmark yield closed at 7.17%.
Economic news: Indian Q1 GDP climbed 7.8%. India is the fastest growing economy as China’s Q1 growth was 6.3%. Agriculture sector recorded a 3.5 per cent growth. Mfrg sector growth decelerated to 4.7%. Construction sector grew by 7.9%. Services sector grew by 12.2%. Mining sector grew by 5.8%.Growth was supported by a strong uptick in private consumer and investment spending, which grew by 6 per cent and 7.8 per cent respectively.
Core sector output expanded 8 per cent year-on-year in July. It came in lower than the 8.2 per cent mark registered in June.
US PCE price index climbed from 3.0% yoy to 3.3% yoy, while Core PCE price index ascended from 4.1% to 4.2%, both in alignment with market predictions.
Data highlights: – US Weekly jobless claims declined to 228k, Personal spending rose 0.8% m/m, income rose 0.2% m/m and Core PCE Index grew by 0.2% m/m
-EU flash CPI climbed 5.3% y/y, Unemployment rate was reported at 6.4%.
-German retail sales declined -0.8% m/m.
Friday’s calendar : US Employment data
-US ISM (mfrg) and construction spending
-EU PMI(mfrg-final) and UK PMI(mfrg-final)
| USD/INR | 82.77 | 82.57 | ||
| EUR/USD |
1.0849 |
1.0941 | 1.0834 | |
| GBP/USD |
1.2673 |
1.2736 | 1.2651 | |
| USD/JPY |
145.38 |
146.26 | 145.35 |
Daily Support/Resistance table
| Currency Pairs | Pivot | R1 | R2 | R3 | S1 | S2 | S3 |
| EURO/USD | 1.0872 | 1.0910 | 1.0978 | 1.1016 | 1.0803 | 1.0766 | 1.0697 |
| GBP/USD | 1.2687 | 1.2723 | 1.2771 | 1.2807 | 1.2638 | 1.2603 | 1.2554 |
| USD/JPY | 145.71 | 146.07 | 146.61 | 146.97 | 145.16 | 144.81 | 144.26 |
| USD/INR | 82.70 | 82.83 | 82.90 | 82.63 | 82.50 |
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
| Currency Pair | Supports | Resistances | Trend | Remarks |
| EURO/USD | 1.0765/1.0635 | 1.0945/1.1065 | DN | UP>1.1070 |
| GBP/USD | 1.2350 | 1.28/1.30/1.3150 | DN | UP>1.2820 |
| USD/JPY | 144.50/142 | 147 | UP | SIDE<143.90 |
| USD/INR | 82.35/82.25 | 82.70/82.86/83.14 | SIDE | UP>82.70 |
| USD/CHF | 0.87/0.8550 | 0.8820 | DN | SIDE>0.8820 |
Technicals: Spot closed above 50 and 200 day moving averages.20 day moving average is at 82.80. 50 day moving average is at 82.39.200 day moving average is at 82.25. Daily MACD is in sell zone. Important support is at 82.55/82.35/82.25 and important resistance is at 82.86/83.14. Spot closed above the average level of the day.
Intraday supports and resistances for Sep contract are:
PP: 82.78, S1:82.69, S2:82.57, R1:82.90, R2:82.99.
Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.
However on directional basis, suggest the following:
USD exports be hedged at 83.30/83.50. Imports be hedged at 82.35.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is below major moving averages. Major resistance is at 1.0925/1.1065/1.1140/1.1275.
GBP/USD: The pair is still above 200 day moving averages, but below 50 and 100 day averages. Daily MACD is in sell zone, implying important top at 1.3145 and weekly MACD is in sell zone, implying important top at 1.3145. Important support is at 1.2350. Important resistance is at 1.2820/1.30/1.3145.
USD/YEN: The pair is above 50 and 200 day major averages. Daily MACD is in buy zone, implying important bottom at 137.35. Important resistance is at 147 and support is at 144/142.