Euro is likely to rise back towards 1.1080 level amid expectation of correction in dollar - ICICI Direct
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Currency Outlook
Rupee Outlook
• Rupee depreciated marginally yesterday amid muted domestic market sentiments and dollar demand from importers. Additionally, trading activity remained subdued as most global markets were shut on account of New Year’s holiday.
• Rupee is likely to trade with positive bias amid expectation of correction in dollar and US treasury yields as market weigh the prospect of steep interest rate cuts from US Fed in 2024. Further, investors will remain cautious ahead of major economic data from US this week for more clues on central bank next move. As per CME FedWatch tool market are now pricing in 78% chance of rate cut in March. USDINR Jan will slip towards 83.15 levels as long as it stays below 83.40 levels
Euro and Pound Outlook
• Euro is likely to rise back towards 1.1080 level amid expectation of correction in dollar. Further, ECB policymakers have signaled that central bank may keep rates higher for longer duration compared to expectation to defeat inflation. Meanwhile, investors will remain cautious ahead of manufacturing pmi data from euro zone. EURINR Jan may rise towards 92.30 level as long as it trades above 91.75 levels.
• Pound is expected to rise back towards 1.2780 levels on prospect of further correction in dollar. Meanwhile, traders will remain cautious ahead of manufacturing pmi data from UK. GBPINR Jan is likely to move north towards 106.30 level as long as it stays above 105.70 levels.
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