October 8, 2024
New Delhi, India
Currency Market Analysis
USDINR
- Trading Range: 84.00 – 84.10
- Closing Price: 84.06
The Rupee ended the day nearly unchanged, avoiding downward pressure from equity-related outflows. In a bullish move for the currency, India’s foreign exchange reserves crossed $700 billion for the first time ever, providing a solid financial buffer. Additionally, India’s trade minister commented that it may be time for the rupee to appreciate, indicating positive sentiment from policymakers regarding the currency’s future trajectory.
EURINR
- Trading Range: 91.88 – 92.68
- Closing Price: 92.10
The Euro dropped sharply following worse-than-expected German industrial orders in August, which fell significantly more than forecasted. ECB Vice President Luis de Guindos indicated that eurozone inflation is on track to hit the 2% target by the end of 2025, fueling speculation about future rate adjustments. On the positive side, retail sales in the Euro Area saw a modest increase of 0.2% in August, suggesting consumer demand remains resilient despite broader economic challenges.
GBPINR
- Trading Range: 109.49 – 110.89
- Closing Price: 110.21
The British Pound weakened as expectations grew for more aggressive interest rate cuts by the Bank of England in November. In the housing market, the Halifax House Price Index showed a 4.7% year-on-year increase in September 2024, pointing to continued strength in the sector. However, BOE Governor Andrew Bailey signaled a shift toward a more “activist” approach to cutting rates, which contributed to the currency’s decline as traders adjusted their expectations for the pound.
JPYINR
- Trading Range: 56.53 – 57.15
- Closing Price: 56.88
The Japanese Yen came under pressure as verbal warnings against speculative moves in the forex market were issued by Atsushi Mimura, a top government official. Prime Minister Shigeru Ishiba and Economy Minister Ryosei Akazawa urged caution before implementing further interest rate hikes, given the current economic conditions. Market participants are now closely watching upcoming Japanese wage data, which could provide more insight into inflation trends and the Bank of Japan’s next policy moves.
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