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Rupee Outlook and Strategy

• The US dollar surged amid risk aversion in global markets and rise in US treasury yields. 10 year note yields reached 2.793%, highest since January 2019, on anticipation that the Fed will be more aggressive in tightening monetary policy to combat high inflation

• Rupee future maturing on April 27 depreciated marginally by 0.04% amid strong dollar and weak domestic market sentiments. Further, the rupee slipped on persistent FII outflows

• The rupee is expected to depreciate today on the back of strong dollar and risk aversion in global markets. Market sentiments are hurt on worries over supply chain disruption due to Covid-19 lockdown in China, escalating geopolitical tensions in Ukraine and major central banks across globe adopting aggressive monetary tightening policy to combat inflation. Additionally, traders will remain vigilant ahead of inflation data from country. However, a sharp fall in rupee may be prevented on softening of crude oil prices. US$INR (April) is expected to trade in a range of 75.90-76.30

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