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Currency Outlook

Rupee Outlook

* Rupee appreciated a bit on Tuesday to 82.92 ahead of the key economic numbers. Meanwhile the stronger dollar and higher crude oil prices checked its gains.

* The pair is expected to face the hurdle near 83.10 and move back towards 82.80 amid strong factory output data. The Factory output grew to five month high of 5.7% in July. Meanwhile, sticky inflation numbers, which is still above RBI’s higher band of 6% could force the RBI to keep its liquidity conditions tight. Now the investors will eye on today’s key US CPI numbers, which could provide more clues to the future rate path. USDINR is expected to consolidate in the range of 82.80-83.10. 

Euro and Pound Outlook

* Euro remained under pressure on Tuesday amid firm dollar. But better than expected German ZEW economic sentiments supported the pair bounce back towards 1.075. The pair is likely to move inside the range of 1.0710-1.0780 ahead of the key economic numbers. Above 1.0780 it would extend its rebound towards 1.0820. EURINR is likely to find the support near 88.90 and move back towards 89.40 mark

* The pound edged lower despite better than expected job numbers in August. The pair is still holding the key support of 200 day EMA at 1.2450. We expect the pair to consolidate in the band of 1.2450-1.2550 ahead of key economic numbers. However, expectation of weaker GDP numbers could restrict the upside in the pair. GBPINR is expected to face the hurdle near 104 and weaken towards 103.30.