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Currency Outlook

Rupee Outlook

* Rupee depreciated yesterday amid strong dollar and weakness in domestic equities. US treasury yields and greenback gained momentum after FOMC minutes signaled that most policymakers felt that inflation risk could require further monetary tightening

* Rupee is likely to depreciate today amid firm dollar and risk aversion in the global markets. Market sentiments are hurt on fears that US Federal Reserve will keep interest rates elevated for longer duration as recent run of US economic data indicated resilient US economy. Additionally, slew of economic data from China and turmoil in property sector painted gloomy picture of post-pandemic recovery. USDINR is likely to rise further till 83.25 level, as long as it stays above 82.90 level

Euro and Pound Outlook

* Euro ended on negative note amid strong dollar and weak global market sentiments. For today, EURUSD is likely to weaken further towards 1.0830 level as long as it trades below 1.0920 level amid firm dollar and pessimistic global market sentiments. EURINR may face the hurdle near 90.70 level and weaken towards 90.20 level

* Pound edged higher yesterday on expectations that Bank of England will continue to hike rates as data showed wage growth at a record high and latest core inflation figures came in hotter than expected. For the day, the pair is expected to face the hurdle near 1.2800 and weaken towards 1.2700 level amid firm dollar and expectation of slump in retail sales. GBPINR is likely to slip back towards 105.40 level as long as it trades under 106.20 levels

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