Sell GBPINR; target of : 100.90 : ICICI Direct

Govt could use the additional headroom available from subsidy savings on ramping up capex in Budget 2023.

The pound depreciated by 1.20% yesterday after the Bank of England raised its interest rate by 50 basis points to 4.00% in its 10th straight hike while hinting that rates were near their peak. Further, the sterling was pressurised by a strong dollar and sharp drop in UK 10 year bond yields. The pound is expected to trade with a negative bias for the day amid strong dollar and sharp decline in UK 10 year bond yields. Further, market participants will closely watch services PMI and composite PMI data from the UK to gauge economic health of the country. GBPUSD is likely to break the key support level of 1.2180 to continue its downward trend towards the level of 1.2120. GBPINR (February) is expected to drop towards the level of 100.90.

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