August 20, 2024
New Delhi, India
Daily Market Analysis
USDINR
The Rupee remained within a narrow range as its Asian peers reversed early losses, supported by mild dollar sales from foreign banks. India’s economic growth exceeded expectations, as noted by the IMF’s Gita Gopinath, while dollar-rupee forward premiums fell with the 1-year implied yield down 5 basis points to 2.05%.
EURINR
The Euro dropped following data indicating a sharp decline in investor confidence and industrial activity. Despite a stable Q2 GDP growth of 0.3% in the Euro Area, traders are now betting on a 25 bps ECB rate cut in September with a high probability.
GBPINR
GBP gained on the back of strong UK Retail Sales, which could weaken the case for a second consecutive BoE rate cut. The British economy expanded by 0.9% year-on-year in Q2 2024, the highest annual growth since Q3, while manufacturing production rose by 1.1% month-over-month in June 2024.
JPYINR
The Yen depreciated due to the dollar’s strength, spurred by better-than-expected US economic data. Political uncertainty in Japan also weighed on the currency, with reports suggesting that Prime Minister Fumio Kishida may not seek reelection. Despite this, Japan’s economy grew by 0.8% QoQ in Q2, recovering from a 0.6% contraction in Q1.
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