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Currency Outlook

Rupee Outlook

* Rupee moved in a thin range yesterday ahead of key economic data from US to gauge health of the economy and get more clues on timing of interest rate cut. 

* Rupee is likely to depreciate today amid higher US treasury yields and strong dollar. Improved US retails sales numbers and rise in PPI data would support the dollar. Stubborn inflation numbers has increased the bets that Federal Reserve may further delay its rate cuts. Moreover higher crude oil prices and weaker global risk sentiments would also weigh on the rupee. Meanwhile, strong inflows into the domestic markets could support the rupee to trim its losses. USDINR March likely to move towards higher band of the consolidation range at 82.80- 83.00. Only close above 83.00 it would test 83.10.

Euro and Pound Outlook

* Euro lost more than 0.50% yesterday amid strong dollar. Further dovish comments from ECB Governing Council member Stournaras also weighed on the pair. For today, EURUSD is likely to face stiff resistance near 1.09 level and move towards 1.0850 amid strong dollar and weaker economic numbers from Euro zone. Further increasing probability of four rate cuts this year would also check its upside. EURINR March is likely to weaken towards 90.00, as long as it trades under 90.70. 

* Pound also traded lower amid strong dollar. The pair is expected to face stiff resistance near 1.2780 and likely to slip towards 1.27 due to strong dollar and rising yields. Increasing probability of delay in rate cuts by the Fed would weigh on the pair. GBPINR March is likely to move south towards 105.500 level as long as it stays below 106.10 levels.

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