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Rupee Outlook and Strategy

• The US dollar edged higher on Monday after Friday's solid jobs report boosted expectations of a US interest rate hike in May. Meanwhile, further upside was prevented as the conference board employment trends index declined in March to 116.24, down from a downwardly revised 116.75 in February 2023

• Rupee future maturing on April 26 depreciated by 0.09% on Monday amid a strong US dollar

• The rupee is likely to trade with a negative bias amid a rise in US dollar index. Meanwhile, a sharp depreciation may be prevented on FII inflows in domestic equity markets and weakness in crude oil prices. US$INR is expected to surpass the hurdle of 82.12 to continue its upward trend towards the level of 82.20 for the day

Euro and Pound Outlook

• The Euro tumbled more than 0.40% yesterday amid an uptick in the US dollar. Meanwhile, further downside was prevented after ECB policymaker Pablo Hernandez de Cos said core inflation in the eurozone is likely to stay high for the rest of 2023, leaving the door open for further interest rate hikes

• The Euro is expected to trade on a bearish note amid a strong US dollar. Further, market participants will closely watch retail sales (MoM) data from the Euro area, which is expected to drop from 0.3% to -0.8%. EURUSD is likely to break the level of 1.0830 to continue its downward trend towards the level of 1.0810. EURINR is expected to drop towards the level of 89.20

• The pound remained volatile and depreciated by 0.23% on Monday amid a rise in the US dollar. Further, the pound came under pressure as US employers hired at a strong pace in March, adding 236,000 jobs that pushed unemployment down to 3.5%, signalling labour market resilience that will keep the Federal Reserve on track to raise rates again next month • The pound is expected to trade with a negative bias amid a stronger US dollar. GBPUSD is likely to break the key support level of 1.2360 to continue its downward trend towards the level of 20 DMA at 1.2315 in the coming trading sessions. GBPINR is expected to continue its downward trend towards the level of 101.50

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