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Rupee Outlook and Strategy

The US dollar increased by 0.21% yesterday amid risk aversion in global markets, a sharp rise in producer prices and uptick in US treasury yields. Further, the dollar advanced on expectations the US Federal Reserve in its policy meeting will announce wrapping up of its bond purchases sooner than expected, opening the doors for an early rate hike

Rupee future maturing on December 29 depreciated by 0.10% on risk aversion in global markets and persistent FII outflows. Additionally, investors remained vigilant ahead of major central bank monetary policies across globe

The rupee is expected to depreciate on firm dollar, FII outflows and selloff in global markets. Further, investors will stay cautious ahead of outcome of US Fed’s monetary policy and economic data from US. US Fed is expected to signal faster wind-down of its bond buying programme, opening the doors for an early rate hike. US$INR (December) is expected to trade in a range of 75.80-76.30

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