IGI Logo

Rupee Outlook and Strategy

• The US dollar edged higher on Wednesday after the US Federal Reserve meeting minutes showed policymakers are determined to hike interest rates by 25 bps in the next meeting to tame persistently high inflation. Meanwhile, further upside was capped on a drop in US 10 year’s treasury yields

• The rupee future maturing on February 24 depreciated by 0.11% amid a sharp drop in domestic equity markets and strong dollar

• The rupee is expected to depreciate for the day amid a strong dollar and FII outflow from domestic equity markets. Meanwhile, investors will closely watch key macro economic data from the US like initial jobless claims and GDP Q4 data to get cues on economic health of the country. US$INR is likely to break the key resistance level of 83.00 to continue trading in an upward trend towards the level of 83.10 for the day

Euro and Pound Outlook

* The Euro tumbled almost 0.40% yesterday amid a strong dollar and risk aversion in global markets. Meanwhile, further downside was prevented on a rise in German CPI YoY numbers from 8.6% to 8.7%, which raised hopes that the ECB will continue its policy tightening path for longer

* We expect the Euro to trade with a negative bias for the day amid a strong dollar, weakness in German government bond yields and pessimistic global market sentiments. Meanwhile, traders will closely watch CPI data from the euro area, which is expected to rise from 8.50% to 8.60%. EURUSD is likely to break the key support level of 1.0600 to continue its downward trend towards the level of 1.0570. EURINR (February) is expected to drop towards the level of 87.90

* The pound depreciated by 0.55% on Wednesday after surging on the back of stronger-than-expected British business activity as traders awaited consumer confidence data and focused on Britain’s political headaches. Also, the pound fell on a strong dollar, risk aversion in global markets and drop in UK 10 year’s bond yields

* The pound is expected to trade with a negative bias for the day amid strong dollar, weakness in UK government bond yields and pessimistic global markets sentiment. GBPUSD is likely to break the key support level of 1.2030 to continue its downward trend towards the level of 1.2000. GBPINR (February) is expected to drop towards the level of 99.90

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