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Rupee Outlook and Strategy

• The US dollar edged up almost 0.40% on risk aversion in global markets, strong job data and surge in US treasury yields. Also, hawkish statement from Fed officials led to market enthusiasm fading on potential slowdown in rate hike. However, sharp upside was capped on weaker than expected Philadelphia Fed manufacturing index

• Rupee future maturing on November 28 depreciated by 0.45% yesterday amid weakness in domestic equities and uptick in US dollar

• The rupee is expected to trade with a negative bias for the day amid strong dollar and pessimistic global market sentiments. Further, several US Fed officials suggested that interest rates would continue to rise. However, a sharp fall in the rupee may be prevented on softening of crude oil prices. US$INR (November) is likely to continue its uptrend towards 82.00 level

Euro and Pound Outlook

• The Euro edged lower on Thursday amid strong US dollar and risk aversion in global markets. Further, ECB sees growing risk of financial stability in the euro area and warns that the likelihood of a recession is rising

• The Euro is expected to trade with a negative bias amid strong US dollar and pessimistic global market sentiments. Further, market participants will focus on ECB President Lagarde’s Speech, which may provide more understanding on further interest rate hikes. EURUSD is likely to break key support level of 1.0300 to continue its downward trend towards the level of 1.0250. EURINR is likely to continue with its down trend towards the level of 84.00

• The pound dropped by more than 0.40% yesterday amid a strong US dollar and gloomy global market sentiments. Further, the pound was pressurised after British Finance Minister Jeremy Hunt announced a budget with a string of tax increases and tighter public spending, saying the economy is already in recession and set to contract next year

• The pound is expected to trade with a negative bias for the day amid strong US dollar and risk aversion in global markets. The pound may slip further on concerns over economic growth as Jeremy Hunt said Britain's economy is forecast to shrink next year, with the GDP projected to contract by 1.4% next year. Meanwhile, market participants will closely watch retail sales data from Britain, which is expected to rise from -1.40% to 0.30%. GBPINR (November) is expected to trade towards the level of 96.40

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