IGI Logo

Rupee Outlook and Strategy

* US dollar slipped yesterday amid decline in US treasury yields and rise in risk appetite in the global markets. Further, dollar skid on disappointing economic data from US. US Philly Fed Manufacturing index decline to -12.3 in July from -3.3 in June 2022 and US jobless claims rose to 251K for week ending 16th July from 244K week before

* Rupee future maturing on July 27 appreciated by 0.20% yesterday amid rise in risk appetite in the global markets, softening of crude oil prices and weakness in dollar

* Rupee is expected to appreciate today majorly on the back of weakness in dollar and rise in risk appetite in the global markets. Further, rupee may track ease in crude oil prices. However, sharp gains may be prevented as investors will remain vigilant ahead of Manufacturing and Services PMI data from major countries across globe to gauge economic health. US$INR (July) is expected to trade in a range of 79.70-80.15

Dollar Index Vs US$INR

Euro and Pound Outlook

* Euro appreciated by 0.38% yesterday after ECB raised interest rates by a larger than expected 50bps and unveiled a new plan to buy debt of Europe’s most vulnerable economies. This move takes ECB key interest rate to zero ending bloc’s negative interest rate experiment. Additionally, Russia resumed gas delivery through Nord Stream pipeline after 10 day maintenance stop, prompting relief across European capitals

* Euro is expected to trade with positive bias amid weakness in dollar and optimistic global market sentiments. Further, euro may gain strength as ECB joined its global peers in raising borrowing costs. However, sharp upside may be capped as ECB President Lagarde said bank was accelerating its exit from negative interest rates but not changing the ultimate point of arrival. Additionally, expectation of disappointing economic data from euro area may hurt single currency. EURINR (July) is expected to trade in a range of 81.30-81.90

* Pound appreciated by 0.23% yesterday amid weakness in dollar and optimistic global market sentiments. However, sharp upside was capped as surge in debt costs pushed up by soaring inflation to twice their previous monthly peak added to Britain’s budget deficit in June, highest since April 2021

* Pound is expected to trade with negative bias amid political uncertainty. Investors are watching the race to replace Boris Johnson as British Prime Minister, with former finance minister Rishi Sunak and foreign secretary Liz Truss making it through to the last round of contest to become Conservative party leader. Additionally, expectation of disappointing economic data from country may hurt Pound. GBPINR (July) is expected to trade in a range of 95.30-96.00

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html
SEBI Registration number INZ000183631

Above views are of the author and not of the website kindly read disclaimer