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Currency Outlook

Rupee Outlook

• Rupee appreciated yesterday amid weakness in dollar. Further, rupee was aided by likely inflows. Meanwhile, sharp gains were prevented due risk aversion in the domestic markets and dollar demand from importers

• Rupee is likely to appreciate today amid weak dollar and retreat in US treasury yields. Dollar took back foot ahead of slew of economic data from US scheduled this week, as it will provide fresh signals on how soon Fed may begin cutting interest rates. Meanwhile, sharp gains may be prevented on pessimistic global market sentiments and rise in crude oil prices. Additionally, month end dollar demand from importers may hurt domestic pair. USDINR March likely to slip towards 82.85 levels as long as it sustains below 83.05 levels

Euro and Pound Outlook

• Euro edged up by 0.3% yesterday buoyed by weakness in dollar and hawkish comments from ECB policymakers. They signaled that central bank shouldn’t rush into a decision to cut interest rates. For today, EURUSD is likely to hold the support near 1.0810 level and rise towards 1.0880 level amid soft dollar and as most of ECB officials pushed back rate cut expectations. Meanwhile, anticipation of weak economic data from euro zone may prevent sharp upside in single currency. EURINR March may rise towards 90.40 level as long as it trades above 89.80 levels

• Pound is expected to rise further towards 1.2710 level amid weakness in dollar. Meanwhile, investors will remain cautious ahead of statements from BOE officials to get fresh cues on interest rate outlook. GBPINR March is likely to move north towards 105.50 level as long as it stays above 104.90 levels

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