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Currency Outlook

Rupee Outlook

* Rupee largely remained in a tight range yesterday and settled near 82.76, ahead of the crucial US consumer inflation data. 

* Rupee is likely to depreciate today amid rebound in dollar and US treasury yields. US Dollar and Yields are likely to move north after yesterday’s inflation numbers dragged the odds of early rate cut by Fed. US CPI numbers in February inched higher to 3.2% YoY against forecast of 3.1% YoY. The slightly stronger than expected US CPI report confirmed that the FOMC will not cut the rates sooner if inflation remains above the target 2%. Meanwhile, strong inflows into the domestic markets is likely to favor the rupee to trim its losses. USDINR March likely to find support near 82.70 and move higher towards 83.00. Only a move above 83.00 it would test 83.10.

Euro and Pound Outlook

* Euro pared its gains due to the strong dollar . Its gains were restricted amid dovish comments from the ECB Governing council members and the ECB President Lagarde last week. The probability of 25 bps rate cut has gone up to 90% for June meeting. For today, EURUSD is likely to dip towards 1.090 level as long as it trades under 1.0960 level amid strong dollar and weaker economic numbers from Euro zone. EURINR March may face the hurdle at 90.75 level and slide towards 90.30 levels

* Pound is traded lower yester day after the unemployment rate in UK moved up last month to 3.9%. The pair is likely to face stiff resistance near 1.2830 amid expectation of weak economic numbers and strong dollar. Meanwhile, all focus will be on today’s GDP numbers which could give further clarity in its direction. GBPINR March is likely to move south towards 105.50 level as long as it stays below 106.25 levels

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