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Rupee Outlook and Strategy

• The US dollar edged up on Friday amid a rise in US treasury yields and stronger-than-expected job data. US non farm payrolls increased by 528,000 jobs last month, the largest gain since February. Market participants are of the view that strong labour markets and elevated inflation may force the Fed to continue aggressively raising interest rates in the near term

• Rupee future maturing on August 26 appreciated by 0.20% on Friday after RBI hiked interest rates by 50 bps to tame soaring inflation. Additionally, the rupee gained strength on FII inflows and softening of crude oil prices

• Rupee is expected to depreciate today amid strong dollar and risk aversion in global markets. Market sentiments were hurt on geopolitical uncertainty and as strong jobs report, wage gain in US signalled Fed will have to raise rates even faster to cool the economy. US$INR (August) is expected to trade in a range of 79.20-79.70

Dollar Index Vs US$INR

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