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Rupee Outlook and Strategy

* US dollar declined 0.04% yesterday amid a rise in US stocks and disappointing retail sales data. However, a sharp fall was cushioned as the US Fed said they would accelerate pace of monetary tightening, reducing bond purchases by $30 billion a month. Further, most officials indicated they were prepared to raise short term interest rates at least three times next year

* Rupee future maturing on December 29 depreciated by 0.60% on a strong dollar, selloff in domestic markets and persistent FII outflows. Additionally, investors remained vigilant ahead of US Federal Reserve monetary policy and economic projections

* The rupee is expected to depreciate on a firm dollar, FII outflows and surge in crude oil prices. Further, US Federal Reserve said it will accelerate the reduction of its monthly bond purchases by $30 billion a month. With this pace it will end asset purchases by March and pave the way for three quarter percentage point interest rate hikes by the end of 2022

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