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Rupee Outlook and Strategy

• The US dollar index dropped by 0.44% on Wednesday after Federal Reserve Chair Jerome Powell's comments on the central bank's ongoing fight to lower inflation failed to live up to the more hawkish market expectations

• The rupee future maturing on June 27 appreciated by 0.13% on Wednesday amid soft dollar and uptick in domestic equity markets

• The rupee is likely to appreciate today amid weakness in US dollar index and optimistic domestic markets sentiments. Furthermore, expectations of weak initial jobless claims and existing home sales data from the US will further hurt dollar. Additionally, Fed Chair Powell comments were almost in line with what central bank had signalled at its last policy meeting. US$INR is expected to break the level of 82.00 to continue its downward trend towards the level of 81.90

Euro and Pound Outlook

• The Euro edged up by 0.62% on Wednesday amid weak US dollar. Further, euro was supported after two German policymakers said Euro zone inflation is stubborn and may require a protracted period of high interest rates to contain, partly due to an exceptionally tight labor market

• The Euro is likely to trade with a positive bias for the day amid weakness in US dollar. EURUSD is likely to break the level of 1.1000 to continue its upward trend towards the level of 1.1025. EURINR is likely to trade in upward trend towards the level of 90.30

• The pound rose marginally by 0.04% yesterday as the inflation rate in the UK remained significantly higher than the Bank of England's target of 2.0%, adding to concerns about its stickiness and placing additional pressure on policymakers to maintain the bank's ongoing tightening campaign. Meanwhile, sharp upside was restricted as concerns flared over the Bank of England's ability to protect the economy from stagnating

• The pound is expected to trade with a positive bias amid weak US dollar. Further, pound may be supported on expectations that the BOE will rise interest rates by 25 basis points in its policy meeting today. The pair is expected to continue its upward trend towards the level of 1.2840. GBPINR is likely to trade in upward trend towards the level of 105.00

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