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Rupee Outlook and Strategy

• The US dollar index gained marginally on Monday amid rising expectation that US rates will remain higher for longer. Some of the policymakers hinted that the central bank still has more to go in tightening monetary policy. In contrast, most investors focused on negotiations to raise the US debt limit

• Rupee future maturing on May 29 depreciated by 0.14% on Monday amid strong dollar

• The rupee is likely to depreciate towards 83.00 amid firm dollar and rise in crude oil price. Further, market participants will keep an eye on progress in US debt- ceiling talks and economic data from major countries across globe. US$INR is expected to hold the five day EMA support at 82.70 and rise towards the key level near 83.00

Euro and Pound Outlook

• The Euro found support amid hawkish comments from the ECB President Lagarde. She said they were not done yet in raising interest rates and the inflation outlook is too high and for too long. However the gains were capped after eurozone March construction output fell 2.4% MoM , the biggest decline in more than two years

• The Euro is expected to trade with a negative bias amid firm dollar and expectation of disappointing economic data from eurozone. The Euro is expected to move towards the key support near 1.078, as long as it trades under the 50 day EMA at 1.0845. EURINR is expected to move in the range of 89.40-89.70

• The pound remained in a tight range on Monday after its sharp rebound on Friday. The increase in average price of homes has helped it to remain above the 1.24 mark

• The pound is expected to slip towards the 1.2408 amid strong dollar and expectation of weak economic data from Britain. GBPUSD is expected to dip towards the 50 day EMA support at 1.2408 as long as the pair trades under 1.2480. GBPINR could slip towards 102.80 as long as it trades under 103.50

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