August 22, 2024
New Delhi, India
Currency Market Analysis
USDINR
The Rupee strengthened, aided by potential inflows and a decline in the dollar index, which also boosted other Asian currencies. However, the Reserve Bank of India’s foreign exchange reserves dropped by $4.8 billion, bringing the total to $670.12 billion. Additionally, India’s trade deficit widened to $23.50 billion in July, compared to $19 billion in the same month last year.
EURINR
The Euro gained on growing optimism that the economy might avoid stagnation. German producer prices fell at their slowest pace in 13 months, yet concerns persist. The European Central Bank may need to consider another rate cut in September due to continued economic weakness.
GBPINR
The GBP strengthened as positive signs of economic resilience and moderate inflation led traders to anticipate fewer rate cuts from the Bank of England. Markets are pricing in 44 basis points of rate cuts from the BoE this year, with a 39% chance of a 25-bps cut in September. The British economy saw a 0.9% year-on-year growth in Q2 2024, the highest since Q3 of the previous year.
JPYINR
The Yen remained steady, supported by firm expectations that the Federal Reserve will begin cutting interest rates soon. Japan’s machinery orders rose by 2.1% month-on-month in June, surpassing forecasts of a 1.1% rise. Markets are now focused on upcoming domestic inflation data to gain insights into the Bank of Japan’s future monetary policy.
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