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Currency Outlook:

Rupee Outlook

* Rupee depreciated for the first time in this week amid strong rebound in the dollar and increasing signs that global central banks may have to delay the timing of interest rate cuts.

* Rupee is likely to weaken further amid strong dollar and higher treasury yields. Hawkish comments from the Fed Governor Waller would also support the dollar to hold its gains. The CME Fed-Watch tool indicates a probability of 61.4% for 25 bps rate cut in March, down from 76.9% a day ago. Meanwhile, strong domestic equities and weakness in crude oil prices would limit the downside in the domestic currency. USDINR Jan is likely to rise towards 83.25, as long as it holds above the 83.00. Only close above 83.25 it would rise towards 83.40.

Euro and Pound Outlook:

* Euro slipped more than 0.60% to hit its 1-month low yesterday amid strong dollar. The pair is expected to remain under pressure amid expectation of fall in Eurozone inflation. The probability of rate cut in March stood at 25% . For today, EURUSD is likely to weaken towards 1.0840 level as long as it trades under 1.09. EURINR Jan may weaken towards 90.00 level as long as it holds below 90.75 levels.

* Pound moved lower yesterday amid strong dollar and decline in wage growth numbers. The unemployment rate in the region remain steady near 4.2%. The pair is expected to slide towards 1.2605 levels on recovery in dollar and expectation of softness in the inflation numbers. GBPINR Jan is likely to move south towards 104.80 level as long as it stays below 105.40 levels. Only close below 104.80 it would turn weaker towards 104.60.

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