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Rupee Outlook and Strategy

* US dollar rose 0.28% as the US Federal Reserve started its two day policy meeting, where investors expect the central bank to announce tapering. However, sharp upside was capped on a rise in risk appetite in the global markets

* Rupee future maturing on November 26 appreciated by 0.28% in yesterday’s trading session tracking weakness in the dollar and FII inflows. However, sharp gains were prevented on steady crude oil prices and muted domestic markets

* The rupee is expected to depreciate today on strong dollar and mixed Asian markets. Market sentiments were hurt on worries about contagion from Evergrande groups debt crisis. Additionally, investors will remain vigilant ahead of monetary policy meeting outcome of major central banks across globe. However, a sharp fall may be prevented on IPO related inflows and softening of crude oil prices.

Euro and Pound Outlook

* Euro depreciated by 0.17% yesterday mainly on the back of a strong dollar and weaker-than-expected economic data from the euro area. German Final Manufacturing PMI data was revised lower, indicating a slowdown in activity in October. However, sharp downside was cushioned on rise in risk appetite in the global markets

* Euro is expected to trade with a negative bias on a strong dollar, divergence in monetary policy and expectation of disappointing economic data. Series of weak economic data from euro area may fuel worries over a slowdown in economy. Additionally, market participants will remain vigilant ahead of two major central bank monetary policy meeting outcomes. Furthermore, investors will remain cautious as ECB President Lagarde speaks at an event marking 175th anniversary of bank of Portugal. EURINR (November) is expected to trade in a range of 86.70-87.10

* The pound depreciated by 0.29% yesterday amid strong dollar and worries on post-Brexit spat with EU over Northern Ireland trading arrangements, fishing dispute with France. Further, the pound slipped on uncertainty about whether Bank of England will raise interest rate in the upcoming meeting. However, further downside was cushioned as world shares reached new records

* The pound is expected to trade with a negative bias on strong dollar, concern over rising Covid-19 cases in UK, worries over post-Brexit quarrel with EU over Northern Ireland trading arrangements and fishing dispute with France. Furthermore, market will take cues from economic data from Britain. Additionally, investors will remain vigilant ahead of Bank of England Governor Bailey speech and US Federal Reserve monetary policy meeting outcome. However, sharp downside may be cushioned on hope’s that Bank of England will raise interest rates sooner to address stubbornly high inflation. As long as GBPINR (November) sustains below 102.40, it may slip further till 101.80.

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