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Currency Outlook

Rupee Outlook

• Rupee hit its highest level in last six month against the dollar amid strong inflows to the domestic market and softness in the dollar. It pared some of its gains yesterday as investors turned cautious ahead of the key inflation numbers from US.

• Rupee is likely to appreciate today amid expectation of correction in dollar and US treasury yields. US Dollar and Yields are likely to move south ahead of CPI data, which may give fresh cues on when the Federal Reserve is likely to begin cutting interest rates. Core-CPI is anticipated to show price pressure continued to ebb. Additionally, investors will also eye on domestic CPI numbers. Meanwhile, sharp gains may be prevented on pessimistic global market sentiments. USDINR March likely to face the hurdle near 82.90 levels and weaken towards 82.65 levels

Euro and Pound Outlook

• Euro edged lower by 0.20% yesterday amid dovish comments from the ECB Governing council members and the ECB President Lagarde last week. ECB president in her speech said that the ECB could start cutting rates as soon as June. For today, EURUSD is likely to hold the support near 1.090 level and rise towards 1.0960 level amid expectation of correction in dollar. Meanwhile, investors will remain cautious ahead of consumer price data from Germany. EURINR March may rise towards 90.75 level as long as it trades above 90.30 levels

• Pound is expected to rise further towards 1.2860 level amid expectation of improved job growth numbers in the region. Further, investors will eye on the BOE member Mann’s speech to get more clues on the stance of the central bank. Meanwhile, markets await key economic data, as it could affect expectations for the BOE policy path. GBPINR March is likely to move north towards 106.50 level as long as it stays above 105.90 levels

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