Stock Precision

🏦Founder - Magnus Hathaway Investments, Stock Precision 🇸🇯Ex Wilhelmsen 📚 Not financial advice; markets fluctuate. DYOR.

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What is Dollar Index and why it's important ?

Dollar Index (often referred as to DXY) is a measure of the value of the U.S. dollar relative to a basket of 6 Foreign Currencies

🔰Foreign Currency Weightages against the measure

Euro - 57%
Japanese Yen - 13.6%
Canadian Dollar - 9.1%
British Pound - 11.9%
Swedish Krona - 4.2%
Swiss Franc - 3.6%

⏳Created - 1973

Base Value - 100

Let me explain in simple words - If Dollar Index is 107, USD is expensive by 7%, which hurts emerging economies mostly an expensive USD puts pressure on their financial markets.

If Dollar Index is at 90, its cheaper by 10% than its fair value, which will again hurt the emerging economy as majority exports goes to US.

📚Historic Value

It reached an all-time high in 1984 at nearly 165, and an all-time low of around 70 in 2007. In the years since then, the U.S. dollar index has been relatively range bound, fluctuating between 90 and 110. As of tonight, its trading at 107.9, showing some signs of topping off.

The index is affected by macroeconomic factors, including inflation/deflation in the dollar and foreign currencies in the basket, as well as recessions and economic growth in those countries.

Last week when Japan raised its interest rate after decades, USD some weakness and slipped.

Dollar Index adapts to better represent those countries that the U.S. buys from and sells to most.

💡Interpreting the USDX

An index value of 120 suggests that the U.S. dollar has appreciated 20% versus the basket of currencies over a particular time period. Simply put, if the USDX goes up, that means the U.S. dollar is getting stronger in value compared to the other currencies.

Similarly, an index value of 80, indicating a fall of 20 from its initial value, implies a 20% depreciation in strength relative to the other currencies. The appreciation and depreciation results are a factor of the time period in question.

📊5 ways in which dollar index impacts us?

1⃣ Stock market

When the index falls, the rupee appreciates, and the dollar weakens. As a result, investors in the US see an opportunity for higher returns in India, which leads to an inflow of Foreign Institutional Investment (FII). Due to heavy inflows, there is heavy buying in the overall market, and the stock market turns bullish - goes up.

2⃣ Metal Price Change

If we look at historical data, we can conclude that gold prices are inversely related to the dollar index value. When the dollar index increases and the dollar strengthens, the gold price will fall. Gold gets imported into India in large quantities, and therefore it impacts the economy as a whole.

3⃣ Fuel Prices

India is the largest crude oil importer. The change in the dollar index affects crude oil prices and impacts us. When the dollar index rises, crude oil and other commodities become more expensive. It increases our import costs and widens our current account deficit. Also, it affects the profitability of the oil importers and refineries in India.

4⃣ Inflation

An increase in the dollar index makes the dollar strong and depreciates the Indian rupee's value. A weakened rupee makes imports costlier and impacts Indian company profitability due to increased production costs. Increased costs for companies mean companies have to increase the prices of goods and services, which leads to inflation. The overall Gross Domestic Product (GDP) is impacted and suffers a slowdown when the dollar strengthens.

5⃣ Companies with Dollar-Denominated Debt

Some Indian companies have borrowed Dollar-denominated debt for cost-effectiveness. These companies are directly affected when the dollar rises. A strong dollar proves costly to companies with dollar-denominated debt as they have to shell out more in rupees to repay their debt. It impacts the company's profitability and might lead to a financial crunch.

Enjoyed reading this ?

#DXY #education #investing

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SBI Funds Management IPO

Applied ✅

#SBI #IPO

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Crude Oil Gains by 10%

#Crude #CommodityTrading

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Better late then Never

Indian IT finally pivots towards AI

HCL Tech announces AI plans in first quarter results

#HCLTech #TCS #Investing

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IT stocks are now trading near their strongest technical support zones

Results season starting from next week

With largest cash reserves, any announcement on AI pivot/acquisitions can turn around the stocks for 15-20% upside in short term

#TCS #Investing

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Have Markets started discounting US Iran news like Russia Ukraine

Commodity Prices have shown minimum movement despite Strait of Hormuz closed

#USIran #Commodity

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IREDA - Declares Rs 673 Cr as bad loans in Gensol case

Hopefully the books are clean now and stock can rise to deserved valuations

#IREDA #Investing #GreenEnergy

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IREDA's 38 Years Lending History

Total Lend: Rs 1.62 Lakh Cr

Could not be recovered: Rs 135 Cr only

Company holds records with the strongest and cleanest lender ever in India

#IREDA 💚 #GreenEnergy #Investing

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Important Results this week 🗒️

13 - Monday

- HCL tech
- Bajaj Consumer
- ICICI AMC

14 - Tuesday

- Jindal Saw
- LTTS
- Tata Elxsi

15 - Wednesday

- Aeroflex
- Angelone
- Groww
- HDFC AMC
- Himadri
- ICICI Pru
- Network 18
- RIIL
- Union Bank

16 - Thursday

- BHEL
- Tech Mahindra
- Wipro
- CEAT
- ITC Hotels
- Muthoot Capital
- NELCO
- Polycab
- South Indian Bank
- SW Solar
- Wework

17 - Friday

- Reliance Industries
- Affordable Robotic
- Federal Bank
- Globus Spirits
- Havells
- JSW Steel
- Poonawalla Fincorp
- RBL Bank
- Tata Tech

18 - Saturday

- Axis Bank
- HDFC Bank
- ICICI Bank
- Kotak Bank
- India Cements
- JK Cement
- Yes Bank

Holding any of the above stock in portfolio ?

#Investing #Earnings #Results

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Carried Longs for Monday ?

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Monday Greens

https://t.co/3MnMPs9mPc

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TCS - 2.7% Up

Congratulations 🎊 who added with us

#TCS #Investing

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Can TCS bring the winds of change for Indian IT ?

Dis: Holding

#TCS #Investing

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Most Brokerages remain positive on TCS despite margin pressure this quarter

#TCS #Investing

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Can TCS bring the winds of change for Indian IT ?

Dis: Holding

#TCS #Investing

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Silver is again up 5% Up from good technical buying levels

#Silver

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Silver is again down to value buying levels

Adding Silver ?

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@DemandorSupply Buffer Zone with next month futures

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Natural Gas - Largest Intraday Dip of 6 Month

https://t.co/aALRUk6grr

#NaturalGas

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While the International prices are up 4%

Indian MCX is unable to catch up to benchmark

@MCXIndialtd

#Silver #CommodityTrading #Gold

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@MCXIndialtd

Many a times, wide gap( upto one percent) between International and trading prices on MCX for commodities. Kindly fix this.

Derivatives, price adjustments accounted for.

#MCX

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Can TCS bring the winds of change for Indian IT ?

Dis: Holding

#TCS #Investing

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Eternal Targets: Rs 380

Cmp: Rs 284 ( Predicts 34% Upside)

- Motilal Research

#Investing #Eternal

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Silver is again down to value buying levels

Adding Silver ?

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Nifty - Technical Trend remains bullish above 24000

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Advised Profits Booking in Nifty early morning today

https://t.co/fdoa9mM4Q3