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Rupee Outlook and Strategy

• The US dollar index fell on Tuesday amid a retreat in US treasury yields across curve. The tentative agreement to raise the debt ceiling, which puts a cap on the spending could slow the economic growth. Meanwhile, better than forecast US HPI data and CB consumer confidence numbers limited the downside in dollar

• Rupee future maturing on June 27 depreciated by 0.07% on Tuesday

• The rupee is likely to appreciate amid softness in the dollar and fall in crude oil prices. Furthermore, market participants will keep a close eye on GDP data from the country. The Indian economy is expected to have grown by 5.1% during Q4 and for the entire financial year by 7% despite global headwinds. Moreover, expectation of a decline in US Jolts job opening numbers could hurt the dollar. The US$INR pair could face a hurdle near 82.90 and move towards 82.50

Euro and Pound Outlook

• The Euro rose by 0.19% on Tuesday amid softness in dollar. The weaker set of economic numbers from Europe checked its upside. The Eurozone May economic confidence numbers fell to six months low of 96.50

• The Euro is likely to hold the 200 day EMA near 1.068 and move towards its 10 day EMA at 1.0770 amid softness in dollar. Meanwhile, investors will keep an close eye on German preliminary CPI numbers, which is expected to ease to 0.2%. EURINR is likely to hold the key support near 88.50 and rebound towards 89.20

• The pound bounced back sharply above the 1.24 mark by gaining almost 0.50% on Tuesday amid softer dollar

• The pound is expected to hold its gains and rise back towards 1.2470 amid softness in dollar. GBPUSD is likely to hold the support near 1.2370 and move back towards 20 day EMA at 1.2470. GBPINR could find support near 102.40 and inch higher towards 103.00

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