FRIDAY USDINR & GLOBAL OUTLOOKS :- USDINR WEAK, DOLLAR FALL, STERLING JUMP, US DATA, EURO UP!!

USDINR

Happy Friday, the Domestic currency (Rupee) is most likely to commence the session with a firm note between 82.15 – 82.25 against greenback levels as the dollar fell against most currencies, after initially spiking following a hotter-than-expected U.S. inflation report, as some investors thought the market's initial response to the data was excessive.

• India's central bank has been consistently missing its inflation projections over the last two and half years mainly due to extreme weather conditions that drove up food prices, economists said on Thursday. Inflation has been above the RBI's quarterly projections in the bi-annual monetary policy report (MPR) in eight out of the last 10 quarters until September, while retail price rise exceeded the 4%-6% mandated target band since January.

USDINR INTRADAY

Day Trend: - BUY ON DIP

Weekly Trend: - UPSIDE SELL

INTRADAY RANGE – 82.50 (82.42 – 82.15) 82.02

THE US DATA INTREPRETATION

U.S consumer prices increased more than expected in September and underlying inflation pressures continued to escalate, cementing expectations that the Fed will deliver another 75 bps rate increase.

• The consumer price index rose 0.4% last month after gaining 0.1% in August, the Labor Department said on Thursday. Economists polled by Reuters had forecast the CPI climbing 0.2%. In the 12 months through September, the CPI increased 8.2% after rising 8.3% in August.

• Following the data, fed funds futures have priced in a 9.1% chance of a 100 basis-point rate hike, and a 90.9% probability of a 75 basis-point increase at next month's Federal Reserve policy meeting.

THE EURO

Europe's single currency may have rallied from lows after a Reuters report, citing four sources, said European Central Bank staff sees the need for fewer rate hikes than markets now estimate to tame inflation. That suggested that the situation in the euro zone may not be as dire as many thought.

THE STERLING

Sterling, meanwhile, posted steep gains against the dollar after reports of a possible U-turn by the UK government on its fiscal plans, before strong U.S. inflation data tempered some of those gains.