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Currency Outlook

Rupee Outlook

* Rupee appreciated marginally on Friday amid softness in US treasury yields and some ease in dollar. Meanwhile, sharp gains were prevented on risk aversion in the global markets and elevated crude oil prices

* Rupee is likely to depreciate today amid firm dollar and rise in US treasury yields. Further, rupee may weaken on pessimistic global market sentiments and higher crude oil prices. Market sentiments are hurt as China delivered a smaller cut to lending rates than market expectations. It trimmed 1 year lending rate by 10bps and left its 5 year rate unchanged. USDINR is likely to move north towards 83.30 levels as long as it stays above 83.00 levels

Euro and Pound Outlook

* Euro ended on negative note on the back of strong dollar, disappointing economic data from euro area and decline in European government bond yields. For today, EURUSD is likely to weaken towards 1.0830 level as long as it trades below 1.0910 level amid firm dollar and risk aversion in the global markets. EURINR may face the hurdle near 91.10 level and weaken towards 90.50 level

* Pound edged lower on Friday due to strong dollar and as British retailers reported larger than expected drop in sales in July. For today, Pair may find support near 1.2680 level and rise back towards 1.2780 level on expectation that Bank of England will keep raising rates as recent data like GDP and wage numbers indicated economic resilience. GBPINR is likely to move north towards 106.25 level as long as it trades above 105.50 levels

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