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Rupee Outlook and Strategy

* US dollar declined 0.39% yesterday amid a rise in risk appetite in global markets and decline in US treasury yields. Market sentiments improved as US Federal Reserve chairman Jerome Powell reiterated the central bank’s efforts to tame inflation and also said the bank has not made any decisions about shrinking its balance sheet

* Rupee future maturing on January 27 appreciated by 0.18% on rise in risk appetite in domestic markets and FII inflows. However, further gain was prevented on elevated crude oil prices and investors remained cautious ahead of US Fed Chair Powell’s testimony

* The rupee is expected to appreciate amid weakness in dollar and rise in risk appetite in global markets. Market sentiments improved as fears of aggressive Fed policy tightening calmed after the Fed Chair’s testimony. However, further gains may be prevented as investors will remain cautious ahead of CPI data from India as well as from the US

Dollar Index vs US$INR

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