June 12, 2024
New Delhi, India
Daily Currency Market Analysis
USDINR
The Indian rupee ended weaker in its trading range of 83.45-83.61, impacted by rising U.S. bond yields. This decline was compounded by global economic factors and domestic financial policies.
RBI’s Economic Outlook
The Reserve Bank of India (RBI) has raised its real GDP growth forecast for FY25 to 7.20 percent. This upward revision is attributed to improved demand conditions in both rural and urban areas. Additionally, India’s foreign exchange reserves have reached a historical high of $651.5 billion as of May 31, 2024, reflecting strong economic fundamentals.
EURINR
The EURINR traded between 89.36 and 90.86, with the euro depreciating due to renewed political uncertainty in Europe. French President Emmanuel Macron’s call for a snap election following significant losses to Marine Le Pen’s National Rally party in the EU vote added to the euro’s woes. The rallying dollar, driven by robust U.S. jobs data, further pressured the euro as traders adjusted their expectations for U.S. interest rate cuts.
GBPINR
The GBPINR saw fluctuations, surging initially due to a weaker dollar after softer U.S. inflation data supported expectations of a Fed rate cut in September. However, the pound later dropped as the dollar gained strength amid lower bets on U.S. Fed rate cuts this year. U.S. job creation exceeded expectations in May, dampening prospects for a September rate cut. Market participants are also closely monitoring the upcoming UK employment data for May.
JPYINR
The JPYINR traded in the range of 53.2-53.58. The yen weakened as the U.S. dollar surged on strong U.S. jobs data. Japan’s economy contracted at an annualized rate of 1.8% in the first quarter. Investors are keenly awaiting the Bank of Japan’s policy decision on Friday, particularly regarding potential reductions in the central bank’s monthly bond purchases.
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