FX – MORNING UPDATE :

USDINR opened at 94.58 on Friday and the pair traded in the 94.33-94.67 range. Spot USDINR closed at 94.47, gain of 15 ps for USD as compared to prior day close of 94.22.

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RBI reference rate was fixed at 94.43 on 08/05. May USD/INR closed at 94.54, gain of 21 ps for USD as compared to prior day’s close of 94.33. May Euro/INR closed at 111.34, GBP/INR closed at 128.76. 1 year USDINR fwd premia was trading at around 3% p.a.

FX reserves stood at USD 690.7 bn, as on May 1st. Reserves declined USD 7.8 bn w/w.

PAIRS	RBI REF RATE (08/05)
USDINR	94.43
EURINR	110.92
GBPINR	128.31
JPYINR	60.24

In May, FII’S have sold Rs 6209 Cr of Indian Equities and have sold Rs 814 cr of debt.

Benchmark Nifty declined 150 points (0.62%) on Friday. US S&P climbed 61 points (0.84%) y’day. Nikkei declined 0.19% and Hang seng declined 0.87% y’day.

Euro is now at 1.1786, Pound at 1.3634, Yen at 156.67.

Commodities: Gold is now at USD 4714 and  Brent Crude  at USD 101.30.

Interest rates: USD 10 Yr yield is at 4.36% and 3 m SOFR closed at 3.68%. Indian 10 yr benchmark yield closed at 6.98%.

Economic news: US non farm payrolls increased by 115k during the month, comfortably above consensus forecasts near 60k, while March payrolls were revised higher from 178k to 185k. The unemployment rate held steady at 4.3%. Average hourly earnings rose 0.2% mom for a second consecutive month, undershooting expectations for a 0.3% increase. On an annual basis, wage growth ticked up from 3.4% yoy to 3.6% yoy. Under the current backdrop, market odds remain strongly in favor of no Fed action over the near term, with the probability that rates are held steady this year still sitting at over 70%

USD was under pressure as investors returned to risky assets.

Markets are positioning for a US-Iran peace deal and reopening of shipping routes. However, cross fires in Hormuz is sending mixed message. Oil prices are close to USD 100 and is awaiting further clues on how the peace deal will finally bring an end to war. US investors bought into AI theme further, and tech laden indices climbed ignoring Middle east impact. Asian markets like Nikkei and Kospi also climbed.

Data Highlights: –

Monday’s calendar: – US existing home sales

USD/INR			94.67	94.33
EUR/USD	1.1786		1.1788	1.1722
GBP/USD	1.3634		1.3639	1.3545
USD/JPY	156.57		157	156.43

 

Daily Support/Resistance table

Currency Pairs	Pivot	R1	R2	R3	S1	S2	S3
EURO/USD	1.1765	1.1808	1.1831		1.1742	1.1699
USD/JPY	156.66	156.90	157.23		156.32	156.09
GBP/USD	1.3606	1.3667	1.3690		1.3573	1.3512
USD/INR	94.49	94.65	94.83		94.31	94.15

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Currency Pair	Supports	Resistances	Trend	Remarks
EURO/USD	1.1660	1.1845	SIDE	DN<1.1660
GBP/USD	1.3435	1.3660/1.3715	UP	SIDE<1.3435
USD/JPY	154	158.50/160.45	SIDE	DN<154
USD/INR	94.25/93.85/93.50	94.70/94.90/95.25	UP	SIDE<94.20
USD/CHF	0.7550	0.7925	DN	UP>0.7925

Technicals: Spot closed above 50 and 200 major averages. 20 day moving average is at 94.48. 50 day moving average is at 92.97. 200 day moving average is at 89.87. Weekly trend is up. Important support is at 94.25/93.75. Spot closed below the average level of the day.

Intraday supports and resistances for May contract are:

PP: 94.58, S1:94.38, S2:94.23, R1:94.73, R2:94.93.             

Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is above major averages. Resistance is at 1.1845. Next major support is at 1.1660. Daily trend is sideways and weekly trend is up.

GBP/USD: The pair is above major averages. Daily MACD is in buy zone, implying important bottom at 1.3435 and weekly MACD is in buy zone.. Important support is at 1.3435. Important resistance is at 1.3660/1.3715.

USD/YEN: The pair is below 50 but above 200 day averages. Daily MACD is in sell zone, implying important top at 160.45. Important resistance is at 160.45 and support is at 154.