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Currency Outlook

Rupee Outlook

• Rupee fell to record closing low amid persistent local demand for dollar and FII outflows. Meanwhile, weakness in dollar and optimistic domestic market sentiments prevented further downside in rupee

• Rupee is likely to appreciate today amid expectation of further correction in dollar and decline US treasury yields after FOMC meeting minutes showed Fed officials agreed that they would proceed "carefully" and only raise interest rates if progress in controlling inflation weakened. Moreover, recent minutes failed to displace market expectations that its monetary policy tightening cycle was over. Meanwhile, sharp gains may be prevented on FII outflows and steady crude oil prices. USDINR may slip to 83.25 level as long as its stays below 83.45 levels

Euro and Pound Outlook

• Euro fell back from 3½ month high and slipped by 0.27% yesterday amid recovery in dollar and dovish comments from ECB Governing Council member Simkus. He signaled that he favors keeping ECB policy steady. For today, EURUSD is likely to hold the support near 1.0880 and rise back towards 1.0950 level amid soft dollar and improved economic data from euro zone. Further, ECB President Lagarde said bank can't declare victory over inflation just yet and will have to remain "attentive" until it's firmly headed back to the 2% goal. EURINR may rally back towards 91.40 as long as it trades above 90.90 levels

• Pound is likely to move north towards 1.2600 level amid soft dollar and hawkish comments from BOE officials. While, investors will remain cautious ahead of Autumn Statement where British finance minister Jeremy Hunt is scheduled to announce changes to fiscal policy aimed at boosting the stuttering economy. GBPINR is likely to move higher towards 104.80 level as long a it stays above 104.20

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