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Currency Outlook

Rupee Outlook

• Rupee appreciated yesterday amid weak dollar and decline in crude oil prices. Further, rupee gained strength on rise in risk appetite in the domestic markets and persistent FII inflows.

• Rupee is likely to appreciate today amid expectation of further correction in dollar and softening of US treasury yields across curve. Dollar will slip as recent job data showed American filling for jobless claims rose last week, indicating crack in labor market, boosting confidence that Fed will deliver a series of rate cuts next year. Moreover, US pending home sales figures held at their lowest level since 2001 despite falling mortgage rates. Additionally, positive domestic market sentiments, softening of crude oil prices and persistent FII inflows will aid rupee. USDINR Jan may slip towards 83.09 level as long as its stays below 83.39 level

Euro and Pound Outlook

• Euro fell from 5-moth high and declined by 0.39% yesterday amid rebound in dollar. Meanwhile, sharp downside was cushioned on hawkish comments from ECB Governing council member Holzmann. He said its too early for the ECB to think about rate cuts now and there is no guarantee for rate cuts in 2024. For today, EURUSD is likely to hold the support near 1.1020 level and rise back towards 1.1105 level amid expectation of correction in dollar and hawkish comments from ECB governing council members. Meanwhile, investors will remain cautious ahead of inflation data from Spain to get cues on interest rate outlook. EURINR Jan may rise back towards 92.70 level as long as it trades above 92.00 levels.

• Pound is likely to edged higher towards 1.2770 levels amid expectation of correction in dollar. Meanwhile, investors will remain cautious ahead of economic data from Britain to gauge economic health. GBPINR Jan is likely to move north towards 106.50 level as long as it stays above 105.80 levels

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