August 7, 2024
New Delhi, India
Daily Market Analysis
USDINR
The rupee’s trading range for the day was 83.41-84.61, sinking under pressure from a global aversion to emerging market currencies as investors fled to safe-haven assets. Indian rupee forward premiums surged to a 14-month high on bets of rapid Fed rate cuts. Additionally, the HSBC India Services PMI was revised lower to 60.3 in July 2024 from 61.1 in preliminary estimates.
EURINR
The euro’s trading range was 90.58-92.96, rising due to dollar weakness amidst concerns about the strength of the US economy following a disappointing jobs report. Traders are pricing in at least two more rate reductions by the ECB this year, with the next likely in September. ECB official Stournaras highlighted the potential for inflation to dip below the 2% target due to the struggling Eurozone economy.
GBPINR
The British pound traded within the range of 106.54-107.78, grappling to extend gains due to dovish sentiment surrounding the Fed’s policy stance. Recent US labor data increased the probability of a 50-basis point Fed rate cut to 74.5% in September. BoE Governor Bailey mentioned after the policy decision that the overall inflation trajectory is now closer to the 2% target.
JPYINR
The Japanese yen’s trading range was 56.17-60.73, rallying on bets that the Bank of Japan would raise interest rates further in the coming months. Markets are betting on two more rate increases this fiscal year, with the next hike expected in December. Additionally, Japan’s coincident index reached its highest level in nearly five years.
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