IGI Logo

Rupee Outlook and Strategy

• The US dollar ended on a positive note amid better-than-expected economic data from the US. Investors fear that upbeat economic data from the US may encourage the Fed to raise interest rates higher and keep them elevated for longer. Data showed the number of people filling for jobless claims increased less than expected last week and third estimate of GDP suggested output expanded at an annual rate of 3.2%, faster than the previous estimate of 2.9%

• Rupee future maturing on December 28 appreciated marginally by 0.04% yesterday tracking weakness in the dollar and FII inflows

• The rupee is likely to depreciate today mainly on the back of a firm dollar, rise in crude oil prices and risk aversion in global markets. Market sentiments were hurt as investors fear that solid economic data from the US may keep the US Fed hawkish for longer. Additionally, market participants will remain cautious ahead of inflation and personal spending data from the US to get fresh directional cues. US$INR (December) is expected to trade in a range of 82.60-83.05

Euro and Pound Outlook

• The Euro slipped by 0.13% yesterday, mainly on the back of risk aversion in global markets and a strong dollar. However, sharp downside was cushioned on hawkish statement from an ECB policymaker. ECB Vice-President Luis de Guindos said the central bank may raise interest rates at its current pace for a period of time to curb inflation. Increases of 50 bps may become the new norm in the near term

• The Euro is expected to trade with a negative bias mainly on the back of firm dollar and weak global market sentiments. Market sentiments were hurt as upbeat economic data from the US fuelled worries among investors that the US Fed may stay on its aggressive monetary policy tightening path. However, sharp downside may be cushioned on hawkish statements from ECB officials and expectation of improved economic data from Euro Area. EURUSD is facing strong resistance near 1.0650 levels. As long as it sustains below this level, it may slip back to 1.0530 levels. EURINR (December) is expected to trade in a range of 87.70-88.40

• The pound depreciated by 0.44% yesterday amid a firm dollar and disappointing economic data from the UK. Britain’s GDP data showed the economy contracted more than initial estimate in the third quarter. Economic output fell 0.3% in Q3CY22 compared to the previous estimate of -0.2%

• The pound is expected to trade with a negative bias on a strong dollar and pessimistic global market sentiments. Further, the pound may slip on disappointing economic data from Britain and on worries that the UK economy remained stuck in a stagflationary environment. Moreover, rising borrowing cost may hurt households who are already grappling with a cost of living crisis. GBPUSD is likely to fall back till 1.1900 level as long as it sustains below 1.2120 level. GBPINR (December) is expected to trade in a range of 99.50-100.50

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html
SEBI Registration number INZ000183631

Above views are of the author and not of the website kindly read disclaimer