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Rupee Outlook and Strategy

* The US dollar index fell back from its three-week high due to weaker-than-expected US Jolts job opening numbers and factory orders reports. Further, renewed jitters over the US financial system after a sharp fall in US regional banking shares weighed on the dollar • Rupee future maturing on May 29 depreciated by 0.06% on Tuesday despite a soft dollar and optimistic domestic market sentiments

* The rupee is likely to trade with a positive bias amid weakness in the dollar and decline in crude oil prices. However, upside could be capped ahead of today’s key FOMC meeting, where investors will focus on getting clarity on the future rate path. US$INR is expected to face a hurdle near 82.10 (50 DEMA) and slide towards the 81.74-81.60 zone

Euro and Pound Outlook

* The Euro bounced back from its one-week lows as the dollar retreated after a weaker set of economic numbers. Also, expectation of a 25 bps hike by ECB in its next policy was supportive for the Euro. In the early part of the day, the Euro witnessed a decline as the core consumer prices index fell to 5.6% against market expectation of 5.7%. Further, a decline in Germany March retail sales numbers and weakness in manufacturing PMI numbers also weighed on the Euro

* The Euro is expected to hold its ground amid weakness in the dollar. The pair is expected to trade above the 1.1010 mark as long as it holds the key support of 20 day SMA at 1.095. The bullish crossover of 20 and 50 day EMA would support the pair to rise back towards 1.1060. EURINR is expected to hold the support of 89.60 and move higher towards 90.45-90.60

* The pound depreciated by 0.23% on Tuesday spurred by risk aversion amid renewed banking concerns in the US. Further, weakness in manufacturing numbers added downside pressure to the pair. However, a sharp fall was restricted as nation wise HPI numbers showed some improvement last month

* The pound is expected to consolidate in the wider range of 1.2460-1.2550 ahead of todays key FOMC policy. The 20-day EMA at 1.2450 would act as key support and on the upside 1.255 (Higher Bollinger Band) would act as resistance for the pair. GBPINR is expected to find support near 101.70 and on upside resistance for the pair exists around 102.50

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