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Currency Outlook

Rupee Outlook

• Rupee ended unchanged yesterday amid mixed cues. Strong dollar and jump in US treasury yields kept pair in narrow range. While, rise in risk appetite in the domestic markets and FII inflows prevented fall in rupee

• Rupee is likely to appreciate today amid correction in dollar and US treasury yields. Yields are moving down as investors await fresh signals on when Fed is likely to begin cutting interest rates. Additionally, market will remain cautious ahead of outcome of RBI monetary policy. Moreover, persistent FII inflows and optimistic domestic market sentiments will support rupee to gain strength. USDINR Feb likely to face hurdle near 83.25 levels and slip back towards 82.95 levels.

Euro and Pound Outlook

• Euro rose by 0.11% yesterday amid weak dollar and upbeat German factory data. German factory orders unexpectedly rose by the most in 3½ years. However, sharp upside was capped as Euro Zone Retail sales fell more than expected in December and ECB 1-year inflation expectations eased. For today, EURUSD is likely to hold the support near 1.0720 level and rise back towards 1.0800 level amid soft dollar and optimistic global market sentiments. Meanwhile, investors will remain cautious ahead of economic data from euro zone to gauge economic health of the area. EURINR Feb may rise further towards 89.90 level as long as it trades above 89.30 levels.

• Pound is expected to rise further towards 1.2650 level amid weak dollar and rise in risk appetite in the global markets. Moreover, expectation of improved economic data from Britain will support sterling. GBPINR Feb is likely to move north towards 105.10 level as long as it stays above 104.40 levels.

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