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Currency Outlook

Rupee Outlook

* Rupee appreciated yesterday amid weakness in dollar. Meanwhile, RBI kept the repo rate unchanged at 6.5% for 3 rd consecutive meeting but announced measures to absorb liquidity as inflation concerns resurfaced due to spike in food prices

* Rupee is likely to appreciate today amid expectation of correction in dollar and softening of crude oil prices. Dollar is likely to retreat as moderating price pressure along with with easing labor market in US may bolstered the hopes that Fed may hit a pause button from next meeting. Meanwhile, traders will remain cautious ahead of PPI and consumer sentiment data from US. US$INR is likely to face hurdle near 82.85 and slip back till 82.50 level

Euro and Pound Outlook

* Euro gave up most of its gain yesterday amid recovery in dollar. For today, EURUSD is likely to hold the support near 1.0950 level and rise back towards 1.1020 level amid expectation of correction in dollar and improved global market sentiments. EURINR may rise till 91.30 level as long as it stays above 90.70 level

* Pound ended on negative note amid strong dollar and as UK housing prices added to evidence that the outlook for the British economy remains grim. For today, Pound is expected move south towards 1.2610 level ahead of major economic data from Britain. UK GDP data for second quarter is likely to show no growth on quarterly basis. Further, investors fear that slew of disappointing economic data may add pressure on BOE to pause rate hike. GBPINR is likely slip towards 104.50 level as long as it stays below 105.40 levels

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