IGI Logo

Rupee Outlook and Strategy

* The US dollar index fell more than 0.50% on Thursday as weaker set of economic numbers and hawkish comments form Fed officials reinforced the expectation that Fed will take a pause in its rate hike regime. The US manufacturing contracted for the seven straight month as new orders continued to tumble.

* Rupee future maturing on June 27 appreciated by 0.40% amid softness in dollar and strong GDP numbers

* The rupee is likely to appreciate further amid rising bets of no hike in this month by Fed. The probability of no hike in June has increased to 74%. Furthermore, Non-farm payrolls data is expected to show labour market cooled through may giving Fed more incentive to hold rates steady. The US$INR pair is expected to dip towards 82.10 as long as it trades below the 82.50 mark

Euro and Pound Outlook

* The Euro bounced back from its two-month’s low, after the Eurozone inflation numbers eased to 6.1% in May from 7.% in April. The inflation numbers are still three time higher than the ECB’s inflation target. Meanwhile, hawkish comments form the ECB president to increase the rates has supported the recovery in the Euro

* The Euro is likely to extend its gains amid softness in dollar. Further rising probability of 0.25 bps hike in interest rates by ECB in its June meeting would push the pair towards 1.08. EURINR is likely to hold the key support near 88.20 and rebound towards 89.00

* The pound gained the most by 0.69% on Thursday amid weakness in dollar and optimism in global equities. Further, improvement in Nationwide HPI in May has also supported the pair to went past 1.25 mark

* The pound is expected to hold its gains and rise towards 1.2570 amid softness in the dollar and rise in risk appetite in global market. GBPUSD is likely to hold the support of 20 day EMA at 1.2480 and move back towards 1.2570. GBPINR could find support near 102.800 and inch higher towards 103.50.

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