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Currency Outlook

Rupee Outlook

* Rupee appreciated to 83.30 on Tuesday amid fresh bout of intervention from RBI and stronger Asian currencies. Further, strong domestic growth and higher forex reserves supported the Rupee to trim its last week’s losses.

* Rupee is expected to appreciate again on expectation of further intervention by RBI. Weaker set of economic numbers from US would weigh on the dollar. Moreover, improved risk appetite and improved inflows into the domestic markets would help the rupee to appreciate against the dollar. Improved current account deficit numbers, which narrowed to $10.5 billion in last quarter would also support the rupee to regain its strength. USDINR April is likely to face the hurdle near 83.50 and move back towards 83.20. A move below 83.20 it would slid towards 83.10

Euro and Pound Outlook

* Euro gave up early advance and edged lower after the dollar recovered from losses. The pair was also under pressure due to dovish comments from ECB Governing council member Muller, who emphasized on rate cut in June. EURUSD is expected to consolidate in the band of 1.080 and 1.0860. Meanwhile, forecast of improved retail sales numbers from Germany and higher CPI numbers in Spain would provide some support to the pair to hold the key support at 1.08. EURINR April is likely to find support near 90.20 and move towards 90.70. Only close below 90.20 it would test 90.00.

* Pound took a pause after falling to 1.2600 last week. The pair is expected to consolidate in the band of 1.2580 and 1.2680 ahead of the Financial policy committee minutes. GBPINR April is likely move in the band of 105.00 and 105.80. Only a move below 105.00 it would slip towards 104.80 level.

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