June 3, 2024
New Delhi, India
USDINR
The Indian Rupee traded in the range of 83.21 to 83.59, ending higher due to dollar inflows related to the rebalancing of the MSCI equity indices. This positive movement was bolstered by the Reserve Bank of India’s annual report highlighting the Indian economy’s firm footing. Additionally, the US economy expanded at an annualized rate of 1.3% in Q1 2024, below the earlier estimate of 1.6%, which contributed to the rupee’s strength.
EURINR
The Euro traded between 90.06 and 90.44, closing at 90.25. The currency dropped as markets continued to assess the monetary policy outlook for the European Central Bank. The EU-harmonized inflation gauge for Germany was slightly above expectations for May, rebounding to 2.8%. However, hawkish signals from US Federal Reserve members reduced expectations of a US rate cut by the third quarter, putting pressure on the Euro.
GBPINR
The British Pound surged initially due to a weaker dollar after softer US inflation data supported views of a Fed rate cut in September. However, the GBP dropped later as support for the greenback countered the strong momentum from a hawkish Bank of England (BoE). The International Monetary Fund (IMF) expects two to three rate cuts from the BoE, with investors now favoring the first rate cut in September instead of the previous consensus of June. Retail sales in the UK declined 2.3% month-over-month in April 2024, adding to the mixed trends.
JPYINR
The Japanese Yen traded in the range of 53.16 to 53.62, ending at 53.39. The Yen gained as a broad selloff in risk assets triggered safe-haven buying for the currency. Japan’s benchmark 10-year yield reached 1.1% this week for the first time since July 2011. Additionally, BOJ’s Adachi indicated that the central bank might raise interest rates if sharp falls in the yen lead to further inflation.
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