IGI Logo

Rupee Outlook and Strategy

•  The US dollar index dropped 0.30% on Tuesday after data showed the inflation rate cooled in May to its lowest annual rate in more than two years, which raised expectations that the Federal Reserve will pause interest rate hikes at its two-day meeting ending on Wednesday. However, further downside was restricted on a rise in US 10 year’s treasury yields

• The rupee future maturing on June 27 appreciated by 0.09% on Tuesday amid a soft dollar

• The rupee is likely to appreciate for the day amid a weak US dollar and optimistic global market sentiments. Further, US inflation data strengthened bets that the Federal Reserve may keep interest rates unchanged in its meeting due later in the day. US$INR is expected to face a hurdle near 82.45 levels and move downward towards the level of 82.30

Euro and Pound Outlook

• The Euro gained more than 0.30% after data showed the annual inflation rate in Germany was confirmed at a 14-month low of 6.1% in May 2023, down from 7.2% in the previous month but remained well above the European Central Bank's target of about 2%, which reinforced expectations that the ECB will implement another 25 basis points rate hike during the meeting on Thursday

• The Euro is likely to trade with a positive bias for the day amid weakness in the US dollar and sharp rise in German 10 years bond yields. Further, the Euro may be supported on expectations that industrial production increased by 0.8% in April compared to a 4.1% decline in March. EURUSD is likely to break the level of 1.0812 to continue its upward trend towards the level of 1.0840. EURINR is likely to hold the support near 88.87 levels and rise towards the level of 89.20

• The pound edged up more than 0.85% on Tuesday amid a weak dollar. Further, strong wage growth increased pressure on Bank of England to consider further interest rate hikes

• The pound is expected to trade with a positive bias amid a rise in UK 10 year’s bond yields and a weak US dollar. Further, investors will closely watch GDP data from Britain, which is expected to show the economy expanded in April. The pair is expected to rise further till 1.2650 level as long as it stays above 1.2580 levels. GBPINR is likely to surpass the hurdle of 103.75 to trade in upward trend towards the level of 104

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