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Currency Outlook

Rupee Outlook

*  Rupee moved in a very tight range on Wednesday as most investors awaited key US inflation numbers. Strong inflows into the domestic markets supported the rupee to settle near 83.20.

* Rupee is likely to depreciate today amid strength in the dollar and US treasury yields. Higher US inflation numbers has lowered the probability of June rate cut. The CME Fed watch tool suggest a probability of 83% for no rate cut in June against 34% a week ago. Meanwhile, strong inflows and higher forex reserves will limit the downside in rupee. USDINR April likely to hold the support near 83.20 level (20-Day EMA) and move towards immediate resistance of 83.45 level, a sustain break above 83.45 level pair may rise further towards 83.55 level.

Euro and Pound Outlook

* Euro traded lower and hit a two-month low on Thursday after ECB statement. ECB held the rates steady and signaled for a 25 bps rate cut in June. For today, EURUSD is likely to fall towards 1.0670 level as long as it stays below 1.076 level amid strength in dollar. Further, investors will keep an eye on inflation numbers from Germany and France. EURINR April may decline towards 89.20 level as long as it trades under the 50 day SMA at 90.00 level .

* Pound took a pause after its sharp decline from the 1.27 mark. It is expected to move towards 1.25 level, amid strong dollar and sluggish growth in the region. Expectation of slower growth would hurt the pair. GBPINR April is likely to slip towards 104.30 level as long as it trades under the 104.90 (100-Day EMA). A sustain move below 104.30 level would open doors for 104.00 level

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