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Currency Outlook

Rupee Outlook

• Rupee ended barely changed yesterday amid pessimistic domestic market sentiments. Further, investors remained cautious ahead of slew of economic data from US to get fresh cues on rate trajectory.

• Rupee is likely to appreciate today amid expectation of further correction in dollar and US treasury yields. Dollar is moving south as data showed US services industry growth eased and investors remained cautious ahead of congressional testimony from Federal Reserve Chair Jerome Powell. Additionally, Bloomberg Index Services announced inclusion of Indian government bond in its EM local currency government index and related indices from January 2025, this would boost debt inflows. USDINR March likely to slip towards 82.82 levels as long as it sustains below 83.02 levels

Euro and Pound Outlook

• Euro edged higher by 0.01% yesterday amid weak dollar and positive economic data from euro zone. The Eurozone S&P composite PMI was revised upward to an 8-month high of 49.2 from the previously reported 48.9. For today, EURUSD is likely to hold the support near 1.0820 level and rise towards 1.0880 level amid soft dollar and improved economic data from euro zone. Additionally, ECB is widely expected to leave interest rate at record high. While, investors will lookout for any clues about when interest rates might start falling. EURINR March may rise towards 90.20 level as long as it trades above 89.80 levels

• Pound is expected to rise further towards 1.2740 level amid soft dollar. Meanwhile, sharp upside may be capped as investors will remain cautious ahead of British budget, where finance minister faces pressure to cut taxes. Additionally, activity in construction sector is projected to contract for 6th consecutive time. GBPINR March is likely to move north towards 105.40 level as long as it stays above 104.90 levels

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