IGI Logo

Rupee Outlook and Strategy

• The US dollar index edged down by almost 0.40% on Wednesday after US Federal Reserve held its interest rate steady as widely expected. Further, producer prices index in the US decreased 0.3% month-over-month in May of 2023, following a 0.2% rise in April, and compared to market forecasts of a 0.1% drop, signaling cooling inflation

• The rupee future maturing on June 27 appreciated by almost 0.40% on Wednesday amid weak US dollar and drop in crude oil prices

• The rupee is likely to depreciate for the day as the Federal Reserve held interest rates steady but signaled that borrowing costs will increase by another 50 basis points by end-December. Meanwhile, sharp depreciation may be prevented on softening of crude oil prices. US$INR is expected to find support at 82.05 and rise towards the level of 82.25

Euro and Pound Outlook

• The Euro edged higher by 0.30% on Wednesday amid soft US dollar. Further, rising expectations that the European Central Bank will raise borrowing costs to their highest level in 22 years and leave the door open to more hikes supported single currency. Further, euro was supported on uptick in German 10 years bond yields

• The Euro is likely to trade with a negative bias for the day amid firm dollar after Fed signalled they will increase the interest rate by 50 basis points by the end of the year. Meanwhile, sharp fall may be cushioned on expectations that the ECB will hike its interest rate today. EURUSD is likely to break the level of 1.0810 to trade in downward trend towards the level of 1.0780. EURINR is likely to face resistance near 88.95 levels and drop towards the level of 88.70

• The pound continue to rise on Wednesday amid weak US dollar and as the British economy expanded 0.2% MoM in April 2023, in line with expectations and rebounding from a 0.3% drop in March.

• The pound is expected to trade with a negative bias amid strong US dollar and drop in UK treasury yields. The pair is expected to break the level of 1.2630 and trade in downward trend towards the level of 1.2600. GBPINR is likely to trade in downward trend towards the level of 103.60

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