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Rupee Outlook and Strategy

• US dollar index bounced off two-weeks lows on Friday amid higher treasury yields. But the expectation of no hike in next FOMC meeting kept the upside checked in the dollar index to go beyond 103.65. Thursday’s weak jobless claims numbers raised the bets that Fed will halt its rate hike regime

• The rupee maturing on June 27 appreciated by 0.11% on Friday due to soft dollar and fall in crude oil prices

• The rupee is likely to hold its ground amid softening of crude oil prices and strong FII inflows into the domestic market. Meanwhile, investors will keep an close eye on inflation data from India after central bank kept its rates steady last week and CPI data from US ahead of US Federal Reserve interest rate decision. US$INR is expected to face a hurdle near 82.70 and move back towards 82.30. Only a close below 82.30 would weaken the pair towards 82.10

Euro and Pound Outlook

• Euro on Friday fell by 0.31% amid rebound in the dollar. Further, weaker economic numbers from the Eurozone also weighed over the Euro to slid towards 1.0750.

• The Euro is likely to slip further till 1.0690 levels amid firm dollar. Meanwhile, further downside may be cushioned on divergence in the monetary policy. US Federal Reserve is likely to hit a pause button this week whereas, ECB is likely to continue with its tightening monetary policy to combat stubbornly high inflation. The Euro is expected to glide towards 1.0690 level (200day EMA) as long as it stays below 20-Day EMA at 1.076 level. EURINR is likely to face hurdle near 88.75 levels and tumble towards 88.20 levels

• The pound stick to its gains against the dollar amid increasing probability of rate hike in its upcoming BOE meeting. The higher inflation numbers in the region has raised the probability of more rate hike in the coming months

• The pound is expected to trade with negative bias amid firm dollar. However, sharp downside may be cushioned on expectation of a 25 bps hike in the next BoE policy. The pair is expected to slip towards 1.2530 level as long as it stays below 1.2590 levels. GBPINR is likely to move lower towards 103.30 levels as long as it sustains below 103.75 levels

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