IGI Logo

Rupee Outlook and Strategy

• The US dollar edged higher on the back of upbeat economic data from the US. US Consumer confidence rose to an eight month high in December 2022 due to easing of inflation and a strong labour market. Consumer Index increased to 108.3 in December from 101.4 in November. Meanwhile, sharp upside was capped on optimistic domestic market sentiments and decline in US treasury yields

• Rupee future maturing on December 28 depreciated marginally by 0.03% yesterday amid a sell-off in domestic equities and a firm dollar

• The rupee is likely to depreciate today mainly on the back of a surge in crude oil prices. Oil prices rallied after data showed larger than expected draw in US crude stockpiles. Meanwhile, weakness in dollar and optimistic global markets sentiments may prevent a sharp fall in the rupee. Additionally, RBI’s monetary policy meeting minutes showed governor Das believed rate hikes should continue in India. US$INR (December) is holding strong support near 82.60 level. As long as it sustains above this level rupee may slip back to 83.00 level

Euro and Pound Outlook

• The Euro slipped 0.16% yesterday on the back of a strong dollar. However, sharp downside was cushioned on optimistic domestic market sentiments and improved economic data from the euro area. German Gfk institute survey showed that consumer sentiments is set to extend its recovery heading into the new year

• The Euro is expected to trade with a positive bias, mainly on the back of weakness in the dollar and rise in risk appetite in global markets. Further, improved economic data from the euro area may support the single currency. However, sharp upside may be capped on ongoing fears that the region is slipping into recession. EURUSD is holding support near 1.0550 levels. As long as it sustains above this level, it may rise back to 1.0700 levels. EURINR (December) is expected to trade in a range of 87.70-88.40

• The pound depreciated by 0.83% yesterday amid a strong dollar and disappointing economic data from the UK. Britain public sector net borrowing nearly tripled in November. Net borrowing hit £22 billion last month compared to £8.1 bn in the same month last year. It was also the highest November borrowing since monthly records began in 1993

• The pound is expected to trade with a negative bias on disappointing economic data from Britain. Meanwhile, weakness in the dollar and rise in risk appetite in global markets may prevent a sharp fall in the sterling. GBPUSD is likely to fall back till 1.2000 level as long as it sustains below 1.2160 level. GBPINR (December) is expected to trade in a range of 99.90-100.70

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html
SEBI Registration number INZ000183631

Above views are of the author and not of the website kindly read disclaimer