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Rupee Outlook

• Rupee ended flat yesterday amid decline in US treasury yields and soft dollar. Dollar slipped on dovish statement from Fed officials and prospect of stimulusfrom China

• Rupee is expected to appreciate today as dollar loses its steam. Further, improved global market sentiments and softening of US treasury yields across curve may support rupee. Yields are retreating from its multi-year high as slew of Fed officials signaled that US central bank may not need to tighten monetary policy further than initially expected. Meanwhile, investors will remain cautious ahead of FOMC meeting minutes to get cues on its interest rate outlook. USDINR is likely to slip back towards 83.15 levels as long as it sustains below 83.35 levels 

Euro and Pound Outlook

• Euro edged higher yesterday amid weak dollar, improved economic data from Italy and rise in risk appetite in the global markets. Further, hawkish comments from ECB Governing council member Holzmann supported single currency. For today, EURUSD is likely to rise further towards 1.0650 levels as long as it remains above 1.0560 levels amid soft dollar and improved global market sentiments. EURINR may move north towards 88.60 level as long as it stays above support level of 88.05 levels

• Pound is expected to rise towards 1.2350 level amid soft dollar and improved global market sentiments. However, sharp upside may be capped on expectations that BOE might be done with its most extensive rate hiking cycle. GBPINR is likely to rise towards 102.60 level as long as it trades above 102.00 level.

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