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Rupee Outlook and Strategy

• The dollar eased for a third straight day by 0.86% yesterday amid uptick in investors’ appetite for riskier assets. However, sharp downside was cushioned on surge in US treasury yields and upbeat economic data from US. Data showed retail sales rose 0.9% in April, a solid increase that emphasises US ability to keep ramping up spending even as inflation persists at nearly a 40 year high

• US$/INR future maturing on May 27 appreciated by 0.09% yesterday amid weaker dollar and softening of crude oil prices

• The rupee is expected to appreciate today amid rise in risk appetite in the global markets and softening of crude oil prices. USDINR (May) is trading below its 50 day moving average a strong sign that it can continue its down trend. We expect USDINR to trade in the range of 77.66 to 77.24

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