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Currency Outlook

Rupee Outlook

• Rupee ended little changed yesterday amid dollar demand from importers. Moreover, investors remained cautious ahead of India's GDP data for the October-December quarter and the US personal consumption expenditures price index.

• Rupee is likely to appreciate today buoyed by softness in dollar and decline in US treasury yields. Yields slipped after data showed price gain in US were smallest in nearly 3 years, boosting market expectations that the Federal Reserve will start cutting interest rates in June. Additionally, upbeat economic data from India will support domestic pair. India’s GDP registered robust growth of 8.4% in Q3FY24. Moreover, rise in risk appetite in the domestic market and FII inflows would aid rupee to gain further strength. USDINR March likely to slip towards 82.80 levels as long as it sustains below 83.07 levels

Euro and Pound Outlook

• Euro edged lower by 0.30% yesterday. Euro erased early gains and moved south amid recovery in dollar, unexpected decline in German Retail sales and ease in German CPI. For today, EURUSD is likely to hold the support near 1.0780 level and rise towards 1.0850 level amid expectation of correction in dollar and hawkish comments from ECB officials. Meanwhile, investors will remain cautious ahead of consumer price data from euro zone. Headline inflation is forecasted to ease to 2.5% YoY in February from 2.8% in January. EURINR March may rise towards 90.20 level as long as it trades above 89.60 levels

• Pound is expected to rise further towards 1.2670 level amid expectation of correction in dollar. Meanwhile, markets will remain cautious ahead of BOE officials comments to get fresh cues on rate trajectory and budget scheduled next week. GBPINR March is likely to move north towards 105.20 level as long as it stays above 104.70 levels

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