Rupee is likely to appreciate today amid weak dollar and softening of US treasury yields - ICICI Direct
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Currency Outlook
Rupee Outlook
• Rupee hovered in a tight range as traders remained cautious ahead of inflation data from US and India and US Federal Reserve monetary policy.
• Rupee is likely to appreciate today amid weak dollar and softening of US treasury yields. Dollar is showing weakness as US Federal Reserve is widely expected to keep interest rates unchanged in this meeting but more focus will be on Fed officials update on economic and interest rate projections. Additionally, comments from Fed Chair Powell will be closely watched to get clarity on interest rate outlook. Additionally, India CPI data increased at 5.55% in November but remained under RBI comfort zone of 2-6% for 3 rd consecutive month. USDINR may face hurdle near 83.50 level and slip back towards 83.35 levels
Euro and Pound Outlook
• Euro gained by 0.27% yesterday amid weak dollar and on signs of confidence in Euro Zone economy after German ZEW economic survey rose unexpectedly to 9-month high. For today, EURUSD is likely to edged higher towards 1.0830 levels as long as it stays above 1.0750 levels amid soft dollar and expectation of improved economic data from euro zone. EURINR may rise towards 90.30 level as long as it trades above 89.70 levels
• Pound is likely to slip towards 1.2500 level as recent wage data would reinforce expectations that BOE may cut rates sooner than expected next year. Additionally, UK GDP data is likely to show that economy contracted in October. Meanwhile, weakness in dollar may prevent sharp fall in sterling. GBPINR is likely to move south towards 104.50 level as long as it stays below 105.10 levels
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