October 21, 2024
New Delhi, India
Currency Market Analysis
USDINR
- Trading Range: 84.05 – 84.11
- Closing Price: 84.08
The Indian Rupee fell as outflows from the equity market created downward pressure, though the fall was limited due to sustained dollar sales. Investors are currently pricing in 44 basis points worth of rate cuts by the Federal Reserve across its remaining two policy meetings for 2024. Additionally, India’s retail inflation climbed to a nine-month high of 5.5% in September, adding to the rupee’s woes.
EURINR
- Trading Range: 91.09 – 91.39
- Closing Price: 91.21
The Euro dropped as investors continued to digest the implications of the European Central Bank’s (ECB) latest policy move, which saw a 25 basis point rate cut, bringing the rate down to 3.25%. This was the ECB’s third rate cut this year, as it navigates through a period of slowing economic growth. On the positive side, the Euro Area’s current account surplus widened to €35.2 billion in August, up from €26.8 billion a year earlier.
GBPINR
- Trading Range: 109.12 – 110.16
- Closing Price: 109.84
The British Pound gained after UK Retail Sales figures unexpectedly rose by 0.3% in September, following a 1% surge in August. The strong retail performance boosted sentiment and may influence market expectations regarding the Bank of England’s (BoE) future rate-cut path. The data signals that the UK economy may be more resilient than anticipated.
JPYINR
- Trading Range: 55.82 – 56.52
- Closing Price: 56.03
The Japanese Yen weakened as slowing domestic inflation tempered hawkish expectations surrounding the Bank of Japan’s monetary policy. Japan’s core consumer price index (CPI) increased by 2.4% year-on-year in September, while the broader inflation rate fell to 2.5%, down from 3% in the previous month. This marked the lowest inflation reading since April, diminishing expectations for more aggressive policy tightening by the BoJ.
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