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Currency Outlook

Rupee Outlook

* Rupee appreciated marginally yesterday amid soft dollar, decline in crude oil prices and positive domestic market sentiments. However, sharp gains were prevented amid dollar demand from importers.

* Rupee is likely to appreciate today amid soft dollar and decline in crude oil prices. Dollar is moving south as fresh data showed new orders for key US manufactured capital goods increased moderately in March but the data for the prior month was revised lower. Meanwhile, sharp gains may be prevented as all eyes will be on slew of economic data from US to get cues on the potential timeline of rate cuts by the Federal Reserve. As per CME FedWatch tool market expects easing cycle to start from September. USDINR April likely to slip towards 83.20 level (89-Day EMA) as long as it stays below 83.40 level (10-Day EMA).

Euro and Pound Outlook

* Euro inched lower by 0.02% yesterday amid firm dollar. However, sharp downside was cushioned on improved economic data from euro zone and hawkish comments from ECB Governing Council member Nagel. German April IFO business climate index rose more than expected to an 11-month high. For today, EURUSD is likely to hold the support near 1.0690 level (10- Day EMA) and rise towards 1.0730 levels (20-Day EMA) amid soft dollar and divergence in monetary policy between Fed and ECB. EURINR April is likely to rise towards 89.40 levels as long as it trades above 88.90 levels.

* Pound is expected to find the floor near 1.2430 level and rise towards 1.2505 level (20-Day EMA) amid weakness in dollar. Meanwhile, expectation of disappointing economic data from Britain may prevent sharp upside in pair. Additionally, BoE officials suggested that central bank is more confident that price pressure is ebbing, indicating interest rate cuts. GBPINR April is likely to rise further towards 104.00 level (10- Day EMA) as long as it stays above 103.50 levels

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