June 5, 2024
New Delhi, India
Daily Currency Market Analysis
USDINR
The Indian Rupee traded in the range of 82.77 to 83.67, ending higher as financial markets reacted positively to election results and a robust GDP growth. The HSBC India Manufacturing PMI for May 2024 was 57.5, slightly below market forecasts of 58.4. Nevertheless, the Indian economy expanded by 7.8% year-on-year in the quarter ending March 2024, indicating a solid economic foundation.
EURINR
The Euro traded between 90.15 and 90.41, closing at 90.28. The currency dropped as markets anticipated a potential rate cut from the European Central Bank (ECB) this week, which would be the first since 2016. The HCOB Eurozone Manufacturing PMI rose to 47.3 in May from 45.7 in April, slightly below the preliminary estimate of 47.4. In Germany, the Manufacturing PMI was confirmed at 45.4, the highest in four months, reflecting modest improvement in the manufacturing sector.
GBPINR
The British Pound surged initially due to a weaker dollar after softer US inflation data supported expectations of a Fed rate cut in September. However, the GBP dropped as markets continued to assess the economic backdrop for indications on how restrictive monetary policy will remain this year. The UK Manufacturing PMI rose to 51.2 in May from 49.1 in April, marking its highest reading since July 2022. Despite this, stubborn service inflation in the UK has kept uncertainty about the timing of the Bank of England’s rate cuts.
JPYINR
The Japanese Yen traded in the range of 53.14 to 53.5, closing at 53.32. The Yen weakened as Minister Yoshitaka Shindo emphasized the government’s goal to achieve a primary balance surplus by 2025. The Jibun Bank Manufacturing PMI rose to 50.4 in May, indicating the first expansion since May 2023. Meanwhile, the US Dollar depreciated as Fed officials suggested no further interest rate hikes, impacting the Yen’s performance.
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