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Currency Outlook

Rupee Outlook

* Rupee edged lower on Monday amid higher crude oil pries. The pair moved in a narrow range during the day as the dollar demand remain subdued due to the Labour day holiday in US.

* The rupee is expected to appreciate today amid improving risk appetite in global equities. Increasing hopes of China’s stimulus and Fed pause in its interest rate hike cycle could limit the upside in the dollar. Further, expectation of weaker economic numbers from US could also weigh on the dollar. USDINR is expected to dip towards 82.55, as long as it trade under 82.90 level. Only a move below 82.55, it would weaken further towards 82.40.

Euro and Pound Outlook

* Euro remained in a range as the ECB President avoided providing any indication of whether the central bank will raise or hold interest rates it the next meeting. Meanwhile, the probability of a quarter point hike has decreased below the 50% mark against previous reading of 60% as the core inflation in euro area slowed. The pair is expected to remain in the range of 1.0760-1.0830 ahead of service PMI data from Euro zone. EURINR is likely to find support near 89.20 and move back towards 89.75.

* The pound has been consolidating near the 1.26 zone as it failed to move beyond 1.2750. The pair could find support near 1.2560 and move higher towards 1.2700 amid improved risk sentiments and softness in the dollar. GBPINR is expected to hold support near 104 and rise towards 104.80.

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