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Rupee Outlook and Strategy

* US dollar slipped yesterday amid rise in risk appetite in the global markets and decline in US treasury yields. However, hawkish statement’s from Fed official’s prevented further downside in dollar. Federal Reserve bank of Cleveland President Loretta Mester reiterated that getting inflation down remains critical for central bank

* Rupee future maturing on November 28 appreciated by 0.09% yesterday on the back of weakness in dollar and optimistic domestic market sentiments

* Rupee is expected to trade with a positive bias on weakness in dollar, softening of crude oil prices and rise in risk appetite in the global markets. Meanwhile, sharp gains may be prevented as investors remained focused on the path of US Federal Reserve interest rate increases. Additionally, manufacturing and services pmi data from major countries across that globe are showing activity in both sectors slowed down. US$INR (November) is expected to trade in a range of 81.45-82.00

Euro and Pound Outlook

* Euro rallied yesterday majorly on the back of weakness in dollar and rise in risk appetite in the global markets. Additionally, improved economic data from euro area supported single currency. Euro Zone’s current account deficit narrowed to 8 billion euro’s in September 2022 from 27 billion euro’s in August 2022

* Euro is expected to trade with a positive bias amid weak dollar and optimistic global market sentiments. However, sharp gain’s in single currency may prevented on expectation of disappointing economic data from euro area. Manufacturing and Services PMI data from Euro Area are likely to show that activity in both sector contracted in November 2022. EURUSD is taking support near 1.0220 levels, as long as it sustains above this level EURUSD may rise back to 1.0370 levels. EURINR (November) is expected to trade in a range of 84.00-84.70

* Pound appreciated yesterday amid weakness in dollar and rise in risk appetite in the global markets. Further, data showed that British government borrowed less than expected in October 2022. The Office for National Statistics (ONS) said headline public sector net borrowing totaled 13.549 billion pounds last month. Meanwhile, sharp upside was capped as OECD predicted Britain’s economy to shrink by 0.4% in 2023

* The pound is expected to trade with a negative bias majorly on the back expectation of disappointing economic data from Britain. UK Manufacturing PMI data is forecasted to show that activity in sector contracted for 4 th consecutive month and Services PMI data is likely to show that activity in sector contracted for 3 rd consecutive month. However, retreat in dollar and optimistic global market sentiments may prevent sharp fall in sterling. GBPUSD is facing strong resistance near 1.1960 level and has failed to breach that level multiple times. As long as it sustains below this level pound may slip back to 1.1780 levels. GBPINR (November) is expected to trade in a range of 97.00-97.65

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