IGI Logo

Rupee Outlook and Strategy

• The US dollar index dropped more than 0.80% after the European Central Bank raised interest rates a day after the Federal Reserve paused its hikes. Further, the dollar came under pressure after the Philadelphia Fed Manufacturing Index in the US declined to -13.7 in June 2023 from -10.4 in May. Moreover, a drop in US 10 year’s treasury yields also weighed on the dollar

• The rupee future maturing on June 27 depreciated by 0.13% on Thursday amid hawkish US Federal Reserve

• The rupee is likely to appreciate today amid weakness in the dollar. Further, recent economic data from the US fuelled hopes that the US Fed may remain less hawkish then anticipated. However, sharp gains may be capped on a surge in crude oil prices and as India’s trade deficit widened to a five-month high to $22.12 billion in May. US$INR is expected to find resistance near 82.15 and trade in a downward trend towards the level of 81.90

Euro and Pound Outlook

• The Euro rose more than 1.10% and touched levels last seen in mid May on Thursday after the European Central Bank hiked interest rates and signalled further policy tightening is likely. Further, the Euro was supported on a rise in German 10 year’s bond yields

• The Euro is likely to trade with a positive bias for the day amid weakness in the US dollar and on hawkish comments from ECB. Meanwhile, investors will closely watch economic figures from Europe and US to gauge economic health. EURUSD is likely to break the level of 1.0960 to continue its upward trend towards the level of 1.1000. EURINR is likely to take support near 89.00 levels and rise towards the level of 89.25

• The pound edged higher by almost 1.00% and touched levels last seen in April 2022 amid a weak US dollar and in anticipation that BoE may also raise interest rates next week

• The pound is expected to trade with a positive bias amid weakness in the US dollar and on expectations that BoE will hike rates by 25 bps next week. The pair is expected to take support near 1.2740 level and continue its upward trend towards the level of 1.2850. GBPINR is likely to trade in upward trend towards the level of 104.25

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