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Currency Outlook

Rupee Outlook

* Rupee depreciated yesterday amid recovery in dollar and strong dollar demand from importers. Meanwhile, further weakness in rupee was prevented due to rise in risk appetite in the domestic markets and softening of crude oil prices

* Rupee is likely to regain its strength today amid expectation of correction in dollar & US treasury yields and decline in crude oil prices. Dollar is likely to move south as softening economic data and recent comments from Fed officials have bolstered expectations that Fed will begin cutting rates as soon as March. Additionally, market will remain cautious ahead of ISM Services PMI and Jolts job opening data to get clarity on future path of interest rates. USDINR may slip to 83.27 level as long as its stays below 83.52 levels

Euro and Pound Outlook

* Euro slipped by 0.40% yesterday amid recovery in dollar and risk aversion in the global markets. Further, disappointing economic data from euro zone and dovish statements from ECB officials weighed on single currency. For today, EURUSD is likely to rise back towards 1.0900 levels as long as it stays above 1.080 levels amid expectation of correction in dollar and forecast of improved economic data. Meanwhile, sharp upside may be capped due to pessimistic global market sentiments and dovish statements from ECB officials. EURINR may rally towards 91.0 as long as it trades above 90.40 levels

* Pound is likely to move back towards 1.2700 level amid expectation of correction in dollar, improved economic data from Britain and on hopes that BOE will keep rates higher for longer compared to peers, given stubbornly high inflation. GBPINR is likely to move higher towards 106.00 level as long a it stays above 105.20 levels

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