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Currency Outlook

Rupee Outlook

• Rupee appreciated marginally on likely US dollar sales by central bank. Further, positive domestic market sentiments and FII inflows supported the pair.

• Rupee is likely to appreciate today amid soft dollar and decline in US treasury yields. Dollar is moving south as US Federal Reserve is widely expected to keep interest rates unchanged in the upcoming policy meeting. More focus will be on so-called dot plots for rates and comments from Fed Chair Powell to get clarity on interest rate outlook. Moreover, US CPI data is likely to show that price pressure is ebbing, giving US Fed more incentive to hold rates steady and perhaps start cutting in 2024. Additionally, rise in risk appetite in the global markets and FII inflows will be supportive for domestic currency. USDINR may face hurdle near 83.50 level and slip back towards 83.35 levels

Euro and Pound Outlook

• Euro gained marginally yesterday amid rise in risk appetite in the global markets. However, strong dollar limited gains in single currency. For today, EURUSD is likely to edged higher towards 1.0800 levels as long as it stays above 1.0720 levels amid soft dollar and optimistic global market sentiments. Additionally, traders even pared back expectations that ECB could cut rates at March meeting. Meanwhile, investors will remain cautious ahead of economic data from Germany. EURINR may rise towards 90.20 level as long as it trades above 89.70 levels

• Pound is likely to rise towards 1.2600 level amid soft dollar and rise in risk appetite in the global markets. Further, BOE is widely expected to hold rates steady in the upcoming meeting but may cut rates at slower pace than its peers. Meanwhile, UK labor market data and GDP data would give the market an important read on the state of the UK's economy. GBPINR is likely to move north towards 105.10 level as long as it stays above 104.50 levels

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