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Currency Outlook

Rupee Outlook

* Rupee closed at record low amid recovery in US dollar and rise in crude oil prices. Additionally, rupee slipped on month end dollar demand from importers. Further, investors remained cautious ahead of GDP data from the country and OPEC+ meeting where production cuts were expected

* Rupee is likely to appreciate today amid expectation of correction in dollar and US treasury yields as data showed US consumer spending rose moderately in October, while annual increase in inflation was smallest in more than 2 ½ years. Additionally, rise in jobless claims suggest a slowing labor market. Fresh data has raised the bet that Fed would soon start cutting rates.

* Moreover, India’s economy expanded 7.6% in Q2 FY24 exceeding expectations. Meanwhile, investors will remain cautious ahead of Fed Chair Powell speech to get more cues on interest rate outlook. USDINR may slip to 83.25 level as long as its stays below 83.50 levels

Euro and Pound Outlook

* Euro slipped by 0.77% yesterday amid recovery in dollar. Further, inflation data from euro zone showed price growth slowed sharply in November, bolstering expectations that ECB is done raising interest rates. For today, EURUSD is likely to hold the support near 1.0850 levels and rise back towards 1.0950 levels amid expectation of correction in dollar and rise in risk appetite in the global markets. Meanwhile, recent inflation data from euro zone has fueled the bets of early spring rate cuts. EURINR may rally towards 91.40 as long as it trades above 90.90 levels

*  Pound is likely to move north towards 1.2700 level amid expectation of correction in dollar and on rising anticipation that BOE will have to keep rates higher for longer compared to other major central banks, given stubbornly high inflation. GBPINR is likely to move h

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