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Currency Outlook:

Rupee Outlook:

• Rupee edged lower on Monday amid strong dollar and weakness in domestic markets. US dollar index rallied to its one-month high on diminishing hopes of early US rate cut.

• Rupee is likely to trade with weaker bias amid strong dollar and US treasury yields. Diminishing prospects of rate cuts by the Federal reserve in March would support the dollar to hold its gains. Moreover, outflow of funds from the domestic equities would again check the rupee appreciation. Now, investors will remain cautious ahead of key economic numbers from US to reassess the rate cut probability in March. USDINR Jan is likely to consolidate in between 83.00-83.25. Only above 83.25 it would open the doors towards 83.40.

Euro and Pound Outlook:

• Euro traded lower on Monday amid strong dollar and negative Eurozone economic numbers. The Eurozone consumer confidence numbers fell to -16.1 last month. EURUSD is likely to face the hurdle near 1.0880 level and slip towards 1.0810 levels amid expectation weaker manufacturing data in the Eurozone and firmness in the dollar. Meanwhile, investors will await key policy decision from ECB this week to get more clarity on future rate path. EURINR January may dip towards 90.20, as long as it trades under 90.70.

• Pound pared all its gains and slide below 1.2650 amid firm dollar. Further increasing bets that the BOE may shift its guidance to a lower rate track to counter its growth expectations hurt the pair. It is likely to face the hurdle near 1.2730 and weaken further towards 1.2660 amid strong dollar and contraction in the manufacturing activity. GBPINR is likely to test 105.30, as long as it trades under 105.90.

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