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Currency Outlook:

Rupee Outlook:

• Rupee depreciated from its 4-month highs amid strong rebound in the dollar. Improved economic numbers from US has diminished the expectation of early rate cuts from the Federal reserve

• Rupee is likely to weaken further amid strong dollar and higher treasury yields. The dollar could find support amid better economic numbers from the US, which would force the Federal reserve to hold its rates higher for longer. Meanwhile, likely intervention from RBI and weakness in crude oil prices would limit the downside in the domestic currency. USDINR Jan is likely to consolidate in the range of 83.00- 83.25. Only close above 83.25 would open the upside in the pair towards 83.40. Likewise, a move below 83.00 would test 82.80

Euro and Pound Outlook:

• Euro remained under pressure yesterday amid strong dollar, The pair recovered most of its losses towards the end of session as comments form ECB president pushed back the odds ECB rate cuts in March to only 21%. The pair is expected to extend its rebound from its one month lows on expectation of hawkish ECB. For today, EURUSD is likely to rise towards 1.0940 level as long as it trades above 1.085. EURINR Jan could find support near 90.20 and rebound towards the immediate hurdle at 90.80.

• Pound reversed its losses and gained more than 0.30% yesterday after the inflation numbers marked 4%, dragging back the probability of rate cuts further. The pair is expected to hold the support at 1.26 and move back towards 1.2740. GBPINR Jan is likely to move north towards 105.80 level as long as it stays above 105.00 levels.

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