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Currency Outlook

Rupee Outlook

* Rupee appreciated yesterday amid pullback in US treasury yields and softening of crude oil prices. Meanwhile, investors remained cautious ahead of economic data from US to gauge the economic health

* Rupee is likely to depreciate today amid strong dollar and risk aversion in the global markets. Dollar is gaining strength on hawkish comments from Fed officials and as data showed number of Americans filing new claims for unemployment benefits declined last week, signaling tight labor market conditions. Further, market awaits a speech from Federal Reserve chair Powell to get the hint on rate trajectory. US$INR is likely to hold the support near 82.35 level and rise towards 82.75 levels

Euro and Pound Outlook

* Euro ended on negative note amid strong dollar and dovish comments from ECB Governing Council member Centeno. For today, EURUSD is likely to slip further towards 1.0735 level as long as it trades below 1.0820 level amid strong dollar and risk aversion in the global markets. Market sentiments are hurt on anticipations that US Fed Chair Powell will give relatively upbeat diagnosis on economy and signal that rates will need to continue to be restrictive to control inflation. EURINR may move south towards 88.70 level as long as it stays below 89.40 levels

* Pound is expected to face the hurdle near 1.2620 level and weaken towards 1.2535 level on strong dollar and pessimistic global market sentiments. Further, contraction in British activity promoted markets to trim expectations for further rate hikes from BOE. GBPINR is likely to weaken towards 103.40 level as long as it trades under 104.30 levels

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