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Currency Outlook

Rupee Outlook

• Rupee appreciated on Thursday to settle near the 83.00 mark as potential central bank intervention countered the strength in the dollar

• USDINR is expected to find support near 82.70 and move back towards 83.10 amid firm dollar and higher crude oil prices. The expectation of better economic numbers from the US could support the dollar. Further, increasing bets of higher for longer interest rates would help the dollar to regain its strength against the rupee. Meanwhile, expectation of rising inflows into domestic market amid India’s inclusion in global bond index for emerging markets would limit the downside in rupee. USDINR is expected to find support near 82.70 and move towards 83.10.

Euro and Pound Outlook 

• Euro recovered from its 6-month low after the 10-year German bund yields climbed to 12-year high. The hawkish comments from the ECB officials and better economic numbers from the Euro zone supported its recovery. Euro could face the resistance near 1.068 and weaken further towards 1.06 amid stronger dollar and expectation of weaker manufacturing and service PMI numbers. EURINR is likely to face the hurdle near 88.80 and weaken towards 88.20.

• The pound remained under pressure after the BOE paused its rate hike regime as the British economy slowed in last quarter. The pair is expected to slide towards 1.22 as long as it trades under 1.2350. Only close below 1.22 would weaken further towards 1.2150. GBPINR is expected to move towards 101.40, as long as the pair trades below 102.50.

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