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Rupee Outlook and Strategy

• The dollar slipped by 0.98% on Thursday amid weak economic data. The Philadelphia Fed Manufacturing Index in the US dropped to -3.3 in June, well below forecasts pointing to growth of 5.5, signaling the first contraction in factory activity since May. Additionally, building permits in the US a proxy for future construction, dropped 7% to an annualized rate of 1.695 million in May, the lowest level since September last year and well below forecasts of 1.785 million

• USDINR futures maturing on June 28 slipped by 0.13% on Wednesday amid weakness in dollar

• The rupee is expected to appreciate today amid weak dollar. However, investors will remain vigilant ahead of Fed chair Powell Speech and industrial production data. We feel rupee is likely to appreciate towards its support level of 78.

Dollar Index Vs US$INR

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