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Currency Outlook

Rupee Outlook

• Rupee depreciated yesterday amid firm dollar ahead of US Federal Reserve monetary policy. However, central bank likely intervention prevented rupee from dropping further.

• Rupee is likely to appreciate today amid weak dollar and decline in US treasury yields. Dollar and yields are moving south as US Federal Reserve hold rate steady for 3 rd consecutive time and signaled rate cuts in 2024. The forecasts showed that the policymakers expect to cut their benchmark rate to 4.6% by the end of 2024. The move aligned with downward revisions to PCE inflation expectations for the next two years. Additionally, rise in risk appetite in the global markets along with softening of crude oil prices may support rupee. USDINR may face hurdle near 83.50 level and slip back towards 83.20 levels

Euro and Pound Outlook

• Euro gained by 0.74% yesterday amid weak dollar and optimistic global market sentiments. However, sharp upside was capped as euro zone industrial production fell more than expected in October. For today, EURUSD is likely to edged higher towards 1.0960 levels as long as it stays above 1.0850 levels amid soft dollar and rise in risk appetite in the global markets. Meanwhile, investors will remain cautious ahead of ECB monetary policy, where central bank is likely to keep rates steady but more focus will be on statement to get clarity on interest rate outlook. EURINR may rise towards 91.10 level as long as it trades above 90.40 levels

• Pound is likely to rise towards 1.2700 level amid weak dollar and optimistic global market sentiments. Meanwhile, market will remain vigilant ahead of BOE policy meet, where central bank is widely expected to keep rates steady but more focus will be on statement to get cues on interest rate trajectory. GBPINR is likely to move north towards 105.70 level as long as it stays above 104.90 levels

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