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Currency Outlook

Rupee Outlook

* Rupee appreciated on Friday amid soft dollar and rise in risk appetite in the domestic markets. Further, robust domestic economic data supported pair to gain strength. Meanwhile, investors remained cautious ahead of Fed Chair Powell speech to get clues on interest rate trajectory.

* Rupee is likely to appreciate further today amid weakness in dollar and US treasury yields. Dollar and Yields are moving south as weak economic data from US and dovish statements from Fed officials have cemented expectations that US Fed is done with raising interest rates and will go for rate cut in the first half of 2024. US Fed Chair Jerome Powell struck a cautious tone on further interest rate moves. Additionally, rupee may gain strength on softening of crude oil prices and rise in risk appetite in the domestic markets. USDINR may slip to 83.20 level as long as its stays below 83.50 levels

Euro and Pound Outlook

* Euro slipped by 0.06% on Friday amid dovish comments from ECB Governing council member Villeroy de Galhau. He said “barring any shock, ECB rate hikes are over.” For today, EURUSD is likely to hold the support near 1.0840 levels and rise back towards 1.0930 levels amid weak dollar and optimistic global market sentiments. Further, expectation of improved economic data from euro zone may support single currency. Meanwhile, investors will remain cautious ahead of ECB President Lagarde speech to get more cues on interest rate outlook. EURINR may rally towards 91.0 as long as it trades above 90.40 levels

* Pound is likely to move north towards 1.2740 level amid weakness in dollar and rise in risk appetite in the global markets. Further, sterling may gain strength on anticipation that BOE will have to keep rates higher for longer compared to peers, given stubbornly high inflation. GBPINR is likely to move higher towards 105.70 level as long a it stays above 105.20 levels

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