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Currency Outlook

Rupee Outlook

• Rupee appreciated on Friday amid strong inflow into the domestic markets after the Indian Govt. lowered its FY25 gross borrowing estimates. The rupee ended at 82.92 against its previous close at 82.96.

• Rupee is likely to trim its gains amid firmness in the dollar and rise in US treasury yields. Better than expected US job growth numbers and improved other economic numbers would push the Fed to hold the rates higher for longer. Meanwhile, strong domestic equities and improved flows in to the debt market would limit any major downside in the rupee. USDINR Feb is likely to find support near 82.80 and move higher towards 83.15.

EURINR

Euro and Pound Outlook

• Euro lost more than 0.70% on Friday amid strong reversal in the dollar. The pair is expected to remain under pressure amid strong US dollar and expectation of weak economic numbers in the Euro zone. Forecast of weak service PMI numbers in the Eurozone would weigh on the pair and weaken it towards 1.075. EURINR February is most likely to move towards 89.30, as long as it trades under the 90.00 mark.

• Pound hit the most and lost more than 0.80% on Friday amid strong dollar. It is expected to weaken further towards 1.2550 on strong dollar. Meanwhile, expectation of improvement in in the service sector growth would limit its downside. The pair is expected to remain under pressure as long as it trades below 1.2650. GBPINR Feb is likely to weaken towards 104.20, as long as it trades below 105.20.

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