May 23, 2024
New Delhi, India
Daily Currency Market Analysis
USDINR
- Trading Range: 83.32 – 83.21
- Closing Price: 83.22
- The Indian Rupee strengthened as increased bets of a Federal Reserve rate cut by September eased market concerns. Despite Fed officials putting pressure on Asian currencies by dampening hopes for rate cuts this year, the Rupee remained resilient. Additionally, dollar-rupee forward premiums slipped, with the 1-year implied yield down by 1 basis point to 1.70%.
EURINR
- Trading Range: 90.49 – 90.03
- Closing Price: 90.05
- The Euro remained within a narrow range amid a lack of fresh market catalysts, as investors continued to assess the outlook for US interest rates. In Germany, producer prices declined by 3.3% year-on-year in April 2024, while the ZEW Indicator of Economic Sentiment for Germany increased to 47.1 in May 2024, the highest since February 2022.
GBPINR
- Trading Range: 106.24 – 105.76
- Closing Price: 105.81
- The British Pound surged due to a weaker dollar, driven by softer US inflation data that reinforced expectations of a Fed rate cut in September. Additionally, the UK’s annual inflation rate likely dipped to 2.1% in April, the lowest since June 2021 and close to the Bank of England’s 2% target. The Bank of England held interest rates steady in May, with two members suggesting a decrease, signaling a potential shift towards lower borrowing costs.
JPYINR
- Trading Range: 53.36 – 54.06
- Closing Price: 53.07
- The Japanese Yen weakened as the dollar strengthened following a more hawkish outlook on US interest rates from a Fed official. Further pressure on the Yen came after the Bank of Japan (BOJ) maintained its bond-buying amounts in its latest operation. Japanese Finance Minister Shunichi Suzuki expressed concerns about the adverse effects of the weak Yen on the economy.
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