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Rupee Outlook and Strategy

* The US dollar index retreated from its one and half month high amid decline in US treasury yields and rebound in equities. Further, higher than expected decline in US durable goods order by 4.5% last month has dented some hawkishness built into interest rates. Meanwhile, further downside was limited as US pending home sales number marked its biggest gain in last two and half year by 8.1% in January

* The rupee future maturing on March 28 depreciated marginally amid FII outflow from the domestic equity markets

* The rupee is expected to appreciate for the day amid weakness in dollar and decline in crude oil prices. However, sharp gains may be prevented as investors will closely watch the domestic GDP numbers, which is likely to show that economy expanded at slower pace during Q3FY23 compared to previous quarter. US$INR is likely to dip towards the level of 82.64

Euro and Pound Outlook

* The Euro bounced back from its one and half month low on Monday and closed above the 1.06 mark amid weak dollar and rise in risk appetite in the global markets.

* We expect Euro to trade with a positive bias for the day amid weakness in dollar and on expectation that ECB will act more aggressively than the Fed. EURUSD has formed a bullish engulfing pattern in its daily charts. So as long as 1.053 holds it is expected to rebound again towards 1.066. EURINR (March) is expected to hold the support near 87.30 and move higher towards 88.30

* The Pound appreciated by almost 1% to 1.206 on Monday after UK Prime Minister signed a new trade deal with European Union. The new trade deal to tackle issues with the Northern Ireland Protocol has supported the Pound as Northern Ireland will now return to UK jurisdiction for tax laws

* The pound is expected to trade with a positive bias for the day majorly on the back of the weakness in dollar and as UK new trade deal with EU has brightened outlook for UK’s economy and signalled improved relations with the bloc. Further, focus shifts towards today’s MPC member's speech to get more clarity on the monetary policy outlook. GBPUSD is likely to rise towards 1.2120-1.2150. GBPINR (March) is expected to rise towards the level of 100 as long as it holds above 99.0

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