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Currency Outlook

Rupee Outlook

* Rupee depreciated marginally yesterday due to weak domestic market sentiments and recovery in crude oil prices. Further, investors remained cautious ahead of US job report to get more clarity on interest rate trajectory

* Rupee is likely to appreciate today amid expectation of further correction in dollar and US treasury yields. Dollar is moving south as slew of recent economic data signal cooling economy, possibly giving US Federal Reserve more incentive to hold rates steady and start cutting in first half of 2024. Meanwhile, market participants will keep a close eye on RBI monetary policy meeting, where central bank is likely to keep policy rate unchanged. More focus will be on guidance from central bank to get cues on rate trajectory. USDINR may slip to 83.30 level as long as its stays below 83.50 levels

Euro and Pound Outlook

* Euro edged higher by 0.27% yesterday on the back of weak dollar. Meanwhile, decline in German industrial production capped sharp upside in euro. For today, EURUSD is likely to rise back towards 1.0830 levels as long as it stays above 1.0750 levels majorly on the back of soft dollar. Meanwhile, sharp upside may be capped as ebbing price pressure and slowdown in major economies such as Germany reinforced expectations that ECB will start cutting rates from next year. EURINR may rise towards 90.25 as long as it trades above 89.70 levels

* Pound is likely to move back towards 1.2650 level on weakness in dollar. Further, investors anticipate that the first cut from the BoE might not happen until June, compared with March for both the ECB and US Fed. Meanwhile, market will remain cautious ahead of US job report to get more clarity on interest rate trajectory. GBPINR is likely to move higher towards 105.20 level as long as it stays above 104.65 levels

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