IGI Logo

Rupee Outlook and Strategy

• The US dollar declined by 1.17% on Friday after data showed easing wage growth and contraction in the service sector. Disappointing economic data fuelled expectations of smaller rate hikes. Wages grew 0.3% in December, less than 0.4% in November 2022. ISM Services PMI dropped to 49.6 in December 2022 from 56.5 in November 2022, first time since May 2020. Apart from this, two US Fed officials signalled a smaller rate hike at the next policy meeting

• Rupee future maturing on January 27 depreciated by 0.26% on Friday tracking a strong dollar. Further, the rupee was hurt on risk aversion in domestic market and persistent FII outflows

• The rupee is likely to appreciate today amid weakness in the dollar and rise in risk appetite in global markets. Market sentiments improved as fresh data showed slowdown in wage growth, a buoyant sign for Fed battle against inflation that could ease pressure for further rate hike. Further, softening of crude oil prices will support rupee. US$INR (January) is expected to trade in a range of 82.30-82.75

Euro and Pound Outlook

• The Euro appreciated by 1.12% on Friday mainly on the back of a retreat in the dollar and optimistic global market sentiments. Moreover, eurozone inflation declined back to the single digit territory last month but underlying price pressures are still rising suggesting the ECB will keep raising interest rates. Eurozone CPI eased to 9.2% in December 2022 from 10.1% in the preceding month

• The euro is expected to trade with a positive bias today amid weakness in the dollar and rise in risk appetite in global markets. Further, expectation of improved economic data from region will support single currency. EURUSD is holding support near 1.0570 levels. As long as it sustains above this level it may rise till 1.0700 levels. EURINR (January) is expected to trade in a range of 87.70-88.30

• The pound appreciated by 1.55% on Friday amid weakness in the dollar and rise in risk appetite in global markets but recession fears, soaring inflation and cost of living crisis weighed on the pound and prevented it from gaining further strength

• The pound is expected to trade with a positive bias mainly on the back of a weak dollar and positive global market sentiments. Meanwhile, concern over gloomy economic outlook will weigh on the pound. GBPUSD is likely to rise back to 1.2190 level as long as it sustains above 1.2020 level. GBPINR (January) is expected to trade in a range of 99.20-99.90

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