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Rupee Outlook

• Rupee depreciated yesterday amid weak domestic market sentiments and surge in crude oil prices. Market sentiments were hurt due to rising conflict between Hamas and Israel

• Rupee is expected to appreciate today amid weakness in dollar and softening of US treasury yields. Dollar is showing weakness as two US Fed officials signaled that rates may remain unchanged. They noted that recent selloff in bonds might negate the need for further rate hikes. Meanwhile, rise in crude oil prices may limit gains in rupee. Oil prices are surging as clashes between Hamas and Israel ignited fears that a wider conflict could hit oil supply from Middle East. USDINR is likely to slip back towards 83.20 levels as long as it sustains below 83.40 levels

Euro and Pound Outlook

• Euro recouped most of its loses amid weak US dollar and hawkish comments from ECB Vice President Guindos. He said interest rates are likely to stay at their current levels for some time. For today, EURUSD is likely to rise further towards 1.0610 levels as long as it remains above 1.0530 levels amid soft dollar and improved global market sentiments. Meanwhile, investors will remain cautious ahead of ECB President Lagarde speech to get cues on rate trajectory. EURINR may move north towards 88.25 level as long as it stays above support level of 87.65 levels

• Pound is expected to rise towards 1.2280 level amid weak dollar and rise in risk appetite in the global markets. However, markets will remain vigilant ahead of BOE financial policy committee summary and record. GBPINR is likely to rise towards 102.10 level as long as it trades above 101.40 level.

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