Rupee depreciated yesterday amid strong dollar and surge in US treasury yields - ICICI Direct
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Currency Outlook
Rupee Outlook
* Rupee depreciated yesterday amid strong dollar and surge in US treasury yields. Further, rupee slipped on risk aversion in the global markets
* Rupee is expected to depreciate further mainly on the back of firm dollar and elevated US treasury yields. Yields are rising as fresh economic data from US signaled resilience in the economy, cementing expectations that US Federal Reserve will hold interest rates higher for longer duration that previously estimated. Additionally, hawkish statements from Fed officials are pushing yields up and supporting dollar. Meanwhile, investors will remain cautious ahead of ADP Non-Farm Employment change and services PMI data to get more cues on rate outlook. USDINR is likely to rise further till 83.40 levels as long as it sustains above 83.10 levels
Euro and Pound Outlook
* Euro ended on negative note amid strong dollar and risk aversion in the
global markets. However, further downside was cushioned on hawkish
comments from ECB official. For today, EURUSD is likely to slip further
towards 1.0420 levels as long as it remains below 1.05 levels amid firm
dollar and pessimistic global market sentiments. Additionally, expectations
of disappointing economic data from eurozone will hurt single currency.
EURINR may move south towards 87.00 level as long as it stays below
resistance level of 87.60 levels
* Pound is expected to slip further towards 1.2010 level on firm dollar and on concerns over economic growth outlook. Further, sterling may weaken on expectations that Bank of England might be done with rate hikes. GBPINR is likely to dip towards 100.10 level as long as it trades below 100.90 level.
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