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Currency Outlook

Rupee Outlook

• Rupee depreciated yesterday amid dollar demand from importers and rise in crude oil prices. Moreover, investors remained cautious ahead of GDP and Jobless claims data from US to gauge economic health.

• Rupee is likely to appreciate today amid weakness in dollar and softening of US treasury yields. Dollar is moving south as fresh economic data from US signaled that economy is feeling the heat of aggressive rate hikes, which may prompt US Fed to start cutting rates in early 2024. Additionally, investors will remain cautious ahead of core-PCE price index to get new insight into whether inflation is continuing to moderate, as it would boost chances of rate cuts in March 2024. USDINR may slip towards 83.10 level as long as its stays below 83.35 level

Euro and Pound Outlook

• Euro rallied by 0.65% yesterday amid weak dollar and hawkish comments from ECB Vice President Guindos. He said euro zone inflation must converge towards 2% before ECB can start cutting rates. For today, EURUSD is likely to rise further towards 1.1050 level as long as its stays above 1.0960 level majorly on the back of soft dollar and hawkish comments from ECB policymakers. Meanwhile, investors will remain cautious ahead of economic data from euro zone to get clues on interest rate outlook. EURINR may rise towards 91.90 level as long as it trades above 91.30 levels

• Pound is likely to rise higher towards 1.2730 level amid weak dollar and expectation of improved retail sales data from Britain. Meanwhile, sharp upside may be capped as recent inflation data prompted investors to bring forward bets on when BOE will start cutting rates. GBPINR is likely to move north towards 105.90 level as long as it stays above 105.30 levels

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