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Currency Outlook

Rupee Outlook

• Rupee depreciated yesterday majorly on the back of month end dollar demand from importers. Meanwhile, further weakness in rupee was prevented amid weak dollar, FII inflows and optimistic domestic market sentiments.

• Rupee is likely to appreciate today amid weak dollar and softening of US treasury yields across curve. Dollar and Yield nursed steep losses on expectations that US Fed will start cutting rates next year. As per CME FedWatch tool market is pricing in 71% chance of first cut in March 2024 and as much as 150 bps of Fed easing in the whole year. Additionally, positive domestic market sentiments, softening of crude oil prices and persistent FII inflows will aid rupee. USDINR Jan may slip towards 83.20 level as long as its stays below 83.50 level

Euro and Pound Outlook

• Euro moved up by 0.57% yesterday amid weakness in dollar and rise in risk appetite in the global markets. Meanwhile, sharp upside was capped as 10-year German bund yields fell to 1 year low, weakening interest rate differential. For today, EURUSD is likely to rise further towards 1.1150 level as long as it trades above 1.1070 level amid soft dollar and optimistic global market sentiments. Meanwhile, investors will remain cautious ahead of job and housing data from US to gauge economic health and get cues on timing of rate cuts by Fed. EURINR Jan may rise towards 93.00 level as long as it trades above 92.30 levels.

• Pound is likely to edged higher towards 1.2850 levels amid weakness in dollar and rise in risk appetite in the global markets. GBPINR Jan is likely to move north towards 107.00 level as long as it stays above 106.30 levels

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