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Rupee Outlook and Strategy

• The US dollar index continued to gain on Monday amid risk off sentiment in the global markets. Further, dollar was supported as the Federal Reserve last week signaled that Fed is ready to raise interest rates next month if economy and inflations doesn’t cool further.

• The rupee future maturing on June 27 depreciated marginally by 0.02% on Monday amid strong US dollar and drop in domestic equity markets

• The rupee is likely to depreciate today amid uptick in US dollar index and risk off sentiments in the global markets. Further, rupee may depreciate on expectations of better building permits data from the US. US$INR is expected to break the level of 82.00 to continue its upward trend towards the level of 82.10

Euro and Pound Outlook

• The Euro edged down by 0.18% on Monday amid strong US dollar. However, sharp downside was restricted after two ECB policymakers said the European Central Bank should err on the side of further interest rate hikes as inflation could come in even higher than it expects.

• The Euro is likely to trade with a negative bias for the day amid a firm US dollar. Further, euro may fell on expectations that German PPI may drop from 0.3% to -0.7%. EURUSD is likely to break the level of 1.0906 to continue its downward trend towards the level of 1.0890. EURINR is likely to find resistance near 89.60 level and trade in downward trend towards the level of 89.35.

• The pound dropped on Monday as investors waited for British inflation data and a Bank of England decision later in the week. Further, pound was pressurized by strong US dollar.

• The pound is expected to trade with a negative bias amid strong US dollar. However, sharp downside may be restricted on sharp rise in UK 10 years bond yields. The pair is expected to face hurdle near 1.2810 and trade in downward trend toward the level of 1.2750. GBPINR is likely to trade in a downward trend towards the level of 104.65

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