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Rupee Outlook and Strategy

* The US dollar index rose to the highest level in one week as traders sought safety after a weaker set of economic numbers raised concerns of a recession and forced central banks to reassess their outlook for global monetary policy. Additionally, Minneapolis Federal Reserve President Neel Kashkari said that an extended period of high interest rates could put more stress on banks but would be necessary if inflation stays stubbornly high

* Rupee future maturing on May 29 depreciated by 0.05% on Tuesday on the back of strong dollar

* The rupee is likely to depreciate further towards 82.25 amid rising concerns over health of the global economy and firm dollar. The . US$INR has moved above the 50 day EMA at 82.04 and is likely to move towards the key hurdle at 82.25. On the downside 81.88 would be the key support for the pair.

Euro and Pound Outlook

* The Euro fell more than 0.50% on Thursday amid a strong dollar. Meanwhile, ECB’s monthly survey showed expectations for inflation in the next 12 months increased to 5.0% from 4.6% in February, and inflation expectations for three years ahead climbed to 2.9% from 2.4% in February

* The Euro is expected to remain under pressure and move towards 1.09 amid strong dollar. The pair has broken the key support at 1.094 and the 20 day EMA at 1.098, which could act as key resistance for now. The weakness in the oscillator RSI (45) would also weigh on the pair. For the day, the Euro is expected to slide towards 1.089 as long as it trades under 1.094. EURINR could face resistance near 90.10 and weaken towards 89.60-89.40

* The pound trimmed its earlier losses but remained lower against the dollar after BoE raised interest rates by 25 bps to 4.5% highest level since 2008. The two-year and 10- year government bond yield also dipped amid expectation that there is little room for the BoE to increase the rate further

* The pound is expected to trade with a negative bias on the back of a strong dollar. Further expectation of no improvement in the GDP numbers could weigh on the pair. The pound could slide towards 1.2460 as it has breached the 20 day EMA support at 1.2520. Further reversal in the RSI could also bring correction in the trend. GBPINR is expected to weaken towards 102.50 as long as it trades under 103.20

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