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Rupee Outlook and Strategy

• The US dollar fell marginally by 0.07% on Friday despite the latest reading pointing to the fastest pace of expansion in the country's service sector since April 2022, as new business rose for the second straight month and at a rate that was the fastest since last May. Further, sharp downside was restricted on uptick in US 10 years treasury yields

• Rupee future maturing on April 26 appreciated by 0.09% on Friday amid weakness in US dollar

• The rupee is likely to trade with a positive bias amid weak US dollar. US$INR is likely to remain below the key resistance level of 82.23 and break the level of 9 DMA at 82.10 to continue its downward trend towards the level of 81.90

Euro and Pound Outlook

• The Euro edged higher by more than 0.20% on Friday amid a drop in the US dollar and uptick in German 10 years bond yields. Further, the Euro was supported as Germany Services PMI rose to 55.7 in April 2023, well above market expectations of 53.3. The reading suggested there was an acceleration in services activity growth to the quickest rate since April last year, supported by a pick-up in underlying demand with inflows of new work increasing the most in a year

• The Euro is expected to trade on a bullish note amid weakness in US dollar. Further, the Euro may be supported on expectations that the confidence among businesses rose for a sixth consecutive month despite the recent banking turmoil, high prices and borrowing costs. EURINR is likely to surpass the hurdle of 90.12 to trade in upward trend towards the level of 90.35

• The pound traded flat on Friday despite weaker US dollar and up tick in UK 10 year’s bond yields. Further, the pound was supported as the UK services PMI increased to 54.9 in April 2023, the highest in a year. New order growth hit a 13-month high, with export sales increasing at a solid pace amid rising spending on travel, leisure and entertainment

• The pound is expected to trade with a positive bias amid softer US dollar and rise in UK 10 years bond yields. GBPINR is likely to break the key resistance level of 101.90 to trade in upward trend towards the level of 102.00

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