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Currency Outlook

Rupee Outlook

* Rupee appreciated yesterday amid weakness in dollar . Further, FII inflows and rise in risk appetite in the domestic markets supported rupee . Meanwhile, sharp gains was limited due to month end dollar demand from importers

* Rupee is likely to appreciate further today amid weak dollar, optimistic domestic market sentiments and drop in US treasury yields . Dollar is showing weakness and has sank to its lowest in more than 3-months on anticipation that US Federal Reserve could start cutting rates by the first half of next year . Additionally, dovish statements from Fed officials and mixed batch of economic data from US will weigh on dollar . USDINR Dec may slip to 83 .22 level as long as its stays below 83 .50 levels

Euro and Pound Outlook

* Euro moved up by 0 .36 % yesterday and posted more than 3month high amid weak dollar and hawkish comments from ECB Governing Council member and Bundesbank President Nagel . He said it would be premature for central bank to lower rate soon or to speculate about such steps . For today, EURUSD is likely to rise further towards 1 .1050 level as long as it stays above 1 .0960 levels amid weakness in dollar and rise in risk appetite in the global markets . Meanwhile, investors will remain cautious ahead of inflation data from Germany and Spain to get cues on interest rate trajectory . EURINR may rally towards 91 .90 as long as it trades above 91 .35 levels

* Pound is likely to move further north towards 1 .2780 level amid weak dollar and hawkish comments from BOE Deputy Governor Dave Ramsden . He said monetary policy would need to remain restrictive for some time to defeat inflation . GBPINR is likely to move higher towards 106 .20 level as long a it stays above 105 .50 levels

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