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Currency Outlook

Rupee Outlook

* Rupee paired its initial gains and settled lower amid recovery in dollar and ahead of US weekly jobless claims data. Meanwhile, further weakness was prevented on recovery in domestic markets and soft crude oil prices

* Rupee is expected to appreciate today amid weakness in US dollar and decline in US treasury yields. Dollar dipped on dovish comments from San Francisco Fed President Daly. Meanwhile, investors will remain cautious ahead of job report from US that could help to determine whether Federal Reserve need to raise interest rates again next month. Additionally, RBI is likely to keep its repo rate unchanged. More focus will be on commentary on inflation and growth trajectory. USDINR is likely to slip back towards 83.20 levels as long as it sustains below 83.40 levels

Euro and Pound Outlook

* Euro ended on positive note amid weakness in US dollar and hawkish statement from ECB Vice President de Guindos. However, weaker than expected economic data from Germany capped further upside in the pair. For today, EURUSD is likely to rise further towards 1.0600 levels as long as it remains above 1.050 levels amid soft dollar, hawkish comments from ECB officials and expectation of improved economic data from euro zone. EURINR may move north towards 88.10 level as long as it stays above support level of 87.50 levels

* Pound is expected to rise towards 1.2280 level amid soft dollar. Meanwhile, sharp upside may be capped as data showed biggest slump in UK construction activity since 2020. GBPINR is likely to rise towards 101.60 level as long as it trades above 101.00 level.

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