October 23, 2024
New Delhi, India
Currency Market Analysis
USDINR:
- Trading Range: 84.05 – 84.13
The Indian Rupee slipped due to anticipated equity outflows, while RBI interventions helped limit sharp declines. Meanwhile, a deputy governor of the Reserve Bank of India warned that climate change and technology risks could pose a threat to India’s inflation targeting framework. On a positive note, India’s aggregate demand is expected to recover after the temporary slowdown seen in the second quarter.
EURINR:
- Trading Range: 90.85 – 91.37
The Euro weakened as markets anticipated further monetary easing from the European Central Bank (ECB). ECB President Christine Lagarde’s remarks were interpreted as signaling a downgrade in the Eurozone’s economic outlook. In addition, the Eurozone’s adjusted current account surplus shrank in August, reflecting weakening external trade dynamics, further adding to concerns over the region’s economic health.
GBPINR:
- Trading Range: 108.9 – 109.52
The British Pound dropped as investor focus shifted towards the relative strength of the U.S. economy, boosting the U.S. dollar. In the UK, public sector net borrowing increased to £16.6 billion in September 2024, while inflation fell more than expected, dropping to 1.7%, below the Bank of England’s 2% target. This decline in inflation reinforces expectations of further rate cuts by the BoE.
JPYINR:
- Trading Range: 55.59 – 56.07
The Japanese Yen depreciated amid market fears of a potential currency intervention by Japanese authorities due to excess volatility. Data showed that Japan’s headline inflation slowed to a five-month low of 2.5% in September, while core inflation eased to 2.4%, reflecting reduced inflationary pressures. Government officials, including Mimura, reiterated warnings that they are closely monitoring currency movements and stressed that excessive volatility is undesirable.
