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Rupee Outlook and Strategy

• The US dollar index dropped by 0.11% on Monday amid decline in US 10 year treasury yields. Meanwhile, sharp downside was restricted on rising concerns over the global economic slowdown, which is fueled by prolonged monetary tightening cycles by major central banks

• The rupee future maturing on June depreciated marginally by 0.05% on Monday amid rise in crude oil prices and geopolitical concerns

• The rupee is likely to appreciate today amid weakness in dollar and optimistic domestic market sentiments. Additionally, investors will remain vigilant ahead of economic data from US to gauge economic health as it may influence the further rate hike decision. However, sharp gains may be prevented on firm crude oil prices. US$INR is likely to face resistance near 82.10 levels and slip back till 81.85 levels

Euro and Pound Outlook

• The Euro rose by 0.13% on Monday amid weak US dollar. Meanwhile, sharp upside was restricted as the Ifo business climate indicator for Germany fell for the second consecutive month to 88.5 in June 2023, the lowest level since last December and well below market expectations of 90.7. The recent decline underscored the persistent uncertainty surrounding the recovery in Europe's largest economy

• The Euro is likely to trade with a positive bias for the day amid weakness in US dollar. Further, investors will closely watch ECB President Lagarde Speech for further cues on rate hike path. EURUSD is likely to break the level of 1.0930 to continue its upward trend towards the level of 1.0950. EURINR is likely to trade in upward trend towards the level of 89.70

• The pound dropped marginally by 0.04% on Monday as traders continued to grapple with the implications of the previous week's outsized rate hike by the Bank of England. Further, pound came under pressure on decline in UK 10 year bond yields

• The pound is expected to trade with a negative bias amid concern over economic growth. The pair is expected to drop towards the level of 1.2670, as long as it sustains below the level of 1.2730. GBPINR is likely to trade in downward trend towards the level of 103.90

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