May 15, 2023
New Delhi, India
Daily Currency Market Analysis
USDINR
The USDINR pair experienced a narrow trading range yesterday, fluctuating between 83.49 and 83.59. The rupee ended the day flat due to anticipated interventions by the Reserve Bank of India, which helped alleviate the pressure from dollar demand. Despite a steady flow of dollar demand from various sectors, including significant withdrawals by overseas investors from Indian equities amounting to nearly $2 billion in May, the rupee managed to maintain stability. Investors are also closely monitoring the upcoming U.S. inflation data, which could influence the Federal Reserve’s future monetary policy decisions.
EURINR
The EURINR pair ranged from 89.58 to 90.2. The euro showed strength as investors reassessed their expectations regarding interest rate cuts by major central banks. A notable decline in Eurozone inflation has given the European Central Bank (ECB) room to consider reducing borrowing costs, potentially starting in their next meeting scheduled for June 6. This shift in sentiment has bolstered the euro, despite ongoing economic uncertainties.
GBPINR
The GBPINR pair traded between 104.16 and 104.8. The British pound gained as traders reacted positively to robust economic data from the UK, which showed a 0.6% growth in Q1 2024, surpassing expectations and indicating the economy’s recovery from recession. This growth has led the Bank of England to project a 0.5% expansion for the year, an upgrade from the previous forecast of 0.25% made in February. The pound’s gains were also supported by market expectations that the BoE might delay rate cuts due to the stronger-than-expected economic performance.
JPYINR
The JPYINR pair’s trading range was between 53.25 and 54.15. The Japanese yen remained steady following comments from Bank of Japan (BoJ) Governor Kazuo Ueda, who indicated that the central bank would carefully examine the yen’s recent weakness when setting monetary policy. Additionally, Japan’s services sector sentiment fell to a near two-year low, reflecting ongoing economic challenges. Despite these factors, the BoJ’s stance on maintaining its ultra-loose monetary policy continues to influence the yen’s performance.
Yesterday’s Closing Prices:
- USDINR: 83.5251
- EURINR: 89.61
- GBPINR: 104.94
- JPYINR: 53.78
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