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Market Round-up

The Indian rupee erased the previous week’s gain and ended the week with a loss of 9 paise or 0.10% to 83.39 a dollar amid weaker regional currencies and stronger greenback following upbeat US economic data. The foreign fund inflows and stronger domestic macro can lead to steady price actions in the local rupee even in global uncertainty.

* USDINR Outlook: It was another week, where the spot USDINR was stuck in the range of 83.20 to 83.50. Any break below 83.20 will take it to 82.90 and a break above 83.50 may take it to 83.80. Considering the weak trend in the Asian currencies and the FOMC meeting, the pair is expected to remain volatile within range with slow depreciation.

* On the positive front, India’s FX reserves surged to $604.04 billion as of Dec.1, rose for a third straight week and stood at a more than four-month high, data from the Reserve Bank of India (RBI) showed on Friday. The crude-market strength has softened to the weakest since June as an influx of US cargoes threatens to flood global markets. If US supplies outstrip Asian demand, the barrels may find their way to Europe, worsening the glut and deepening the discountfor near-termbarrels.

* The dollar snapped a three-week decline as Treasury yields rose following solid US employment data and an upbeat University of Michigan report. US 10-year Treasury yields are up three basis points at 4.23%. However, the dollar’s days of serving as a pure play on US rate expectations are about to end as investors increasingly brace for policy shifts from other major central banks.

* US benchmark S&P 500 rose for the sixth straight week, the longest rally since November 2019, as markets parsed hotter-than-projected November jobs data and awaited next week's key Federal Reserve meeting and inflation reports.

* In FX, there was broad dollar selling against every contract that CFTC tracked. The flow was most extreme in sterling (19.6k) and the euro (9.2k), though there was also a reasonable size in the yen (4.3k). There was a swing of about $5 billion in the aggregate dollar position, which is now short just shy of $3 billion.

USDINR

Sell USDINR Dec Fut ONLY Below 83.30 SL 83.55 Target 82.95

USDINR Dec Futures Daily Chart

EURINR

Buy EURINR Dec Fut at 90.05 SL 89.05 Target 91.75

EURINR Dec Futures Daily Chart

GBPINR

Buy GBPINR Dec Fut at 104.35 SL 103.40 Target 105.90

GBPINR Dec Futures Daily Chart

JPYINR

Buy JPYINR Dec Fut at 57.10 SL 56.40 Target 58.20

JPYINR Dec Futures Daily Chart

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