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Currency Outlook

Rupee Outlook

• Rupee is likely to appreciate further amid weakness in dollar and uptick in domestic inflation number. The higher domestic inflation numbers has strengthened the case for RBI to delay rate cuts. The retail inflation rose to 4.8% in June against market expectation of 4.5% amid sharp increase in food prices. Moreover, drop in key US CPI numbers to its two years low has weakened the dollar index and raised the bets that Federal reserve would raise interest rates only one more time this year

• US$INR is likely to decline towards 81.80 as long as its trades under the 82.20 mark. A move below 81.80 would weaken further towards 81.60

Euro and Pound Outlook

• Euro is likely to hold its gains amid weakness in the dollar. Further, expectation of better economic numbers from Eurozone could also provide enough strength to the pair to stay above 1.11 mark. EURUSD is most likely to rise towards 1.1180 level as long as it stays above 1.11. EURINR may find the support near 91.00 level and rise towards 91.80 level.

• Pound is likely to hold its gains amid a weaker dollar. Meanwhile forecast of drop in key UK GDP numbers could restrict sharp upside in the pair. For GBPUSD 1.30 holds a key psychological hurdle. A move above 1.30 it would open the doors for 1.3050. On the downside 1.2940 holds key support for the pair. GBPINR is likely to move in the range of 107.00-106.20. Only above 107.00 it would rise towards 107.60

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