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Rupee Outlook and Strategy

* The US dollar rallied by 0.86% on Friday amid a surge in US treasury yields and as Core PCE price index showed inflation continued to rise faster than Fed’s target. Core PCE price Index rose by 3.6% and PCE price index by 4.4% in September 2021

* Rupee future maturing on November 26 appreciated by 0.03% on Friday’s trading session tracking weakness in dollar. However, sharp gains were prevented on weak domestic equities, FII outflows and steady crude oil prices

* The rupee is expected to depreciate today on strong dollar and rise in crude oil prices. Further, the Indian currency may slip on consistent FII outflows. Additionally, investors will remain vigilant ahead of ISM Manufacturing PMI data from US. However, sharp downside may be cushioned on expectation of improved economic data from country. India’s Nikkei Manufacturing PMI is likely to show expansion in activity in October 2021

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