IGI Logo

Rupee Outlook and Strategy

• The US dollar declined 0.71% yesterday amid a fall in US treasury yields and rise in risk appetite in global markets. Market sentiments improved after China reopened its borders while US treasury yields drifted lower as investors expect the Fed to slow the pace of rate hike. Apart from this, the market believes the Fed will not raise rates beyond 5% as inflation and the economy cools

• Rupee future maturing on January 27 appreciated by 0.39% yesterday tracking weakness in the dollar. Further, a rise in risk appetite in global markets supported the domestic currency

• The rupee is likely to appreciate further today amid weakness in the dollar and rise in risk appetite in global markets. Market sentiments improved on optimism over a gradual reopening of the Chinese economy and on expectations that the US Fed may further dial back the size of its rate hike. Meanwhile, investors will remain cautious ahead of US Fed Chair Powell’s speech to get hints on future monetary stance. US$INR (January) is expected to trade in a range of 82.15-82.60

Euro and Pound Outlook

• The Euro appreciated by 0.83% yesterday mainly on the back of a weakness in dollar and optimistic global market sentiments. Further, the Euro rallied after data from Germany, Europe's largest economy, showed industrial production improved by 0.2% in November compared to 0.4% decline in the preceding month. Additionally, January data in the sentix economic indices indicated a further improvement

• The Euro is expected to trade with a positive bias today amid a retreat in the dollar and rise in risk appetite in global markets. Further, expectation of improved economic data from the region will support the single currency. French Industrial production is likely to improve by 0.9% in November compared to 2.6% decline in October 2022. EURUSD is holding support near 1.0660 levels. As long as it sustains above this level it may rise till 1.0760 levels. EURINR (January) is expected to trade in a range of 88.10- 88.80

• The pound appreciated by 0.80% yesterday amid weakness in the dollar and positive global market sentiments but concern over rising borrowing cost and its impact on economic growth weighed on the sterling. Bank of England’s chief economist warned that the UK faces a more serious threat of persistently high inflation compared to other advanced economies, signalling interest rates will remain higher for longer

• The pound is expected to trade with a positive bias mainly on the back of weakness in dollar, optimistic global market sentiments and improved BRC retail sales data. Market sentiments improved after China reopened its borders and on signs that inflation in the US and Europe is abating, which may encourage central banks to slow the pace of rate hike. GBPUSD is likely to rise back to 1.2250 level as long as it sustains above 1.2120 level. GBPINR (January) is expected to trade in a range of 100.00-100.70

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html
SEBI Registration number INZ000183631

Above views are of the author and not of the website kindly read disclaimer