June 6, 2024
New Delhi, India
Daily Currency Market Analysis
USDINR
The Indian Rupee traded between 82.85 and 84.07, ending higher following the release of impressive GDP growth data. The Indian economy expanded by 7.8% year-on-year in the quarter ending March 2024, significantly surpassing market expectations of 6.7%. However, manufacturing activity eased to a three-month low of 57.5 in May, reflecting some cooling in the industrial sector.
EURINR
The Euro traded in the range of 90.09 to 91.05, gaining strength as expectations grew for closer alignment in monetary policy between the US and Europe. Germany’s seasonally adjusted jobless rate remained steady at 5.9% in May 2024, maintaining this level for six consecutive months, near three-year highs. The European Central Bank (ECB) is anticipated to announce a 25 basis points interest rate cut on Thursday, alongside quarterly forecasts, which has influenced market sentiment.
GBPINR
The British Pound surged due to a weaker dollar, driven by softer US inflation data, which reinforced the view that the Federal Reserve will deliver its first rate cut in September. The GBP traded higher as speculation grew around the Fed’s potential interest rate reduction. The UK Manufacturing PMI rose to 51.2 in May from 49.1 in April, reaching its highest level since July 2022. Despite this positive data, stubborn service inflation in the UK maintains uncertainty around the timing of the Bank of England’s rate cuts.
JPYINR
The Japanese Yen traded within the range of 53.31 to 53.65, appreciating as the US dollar declined on weak US manufacturing data. Bank of Japan (BOJ) Governor Kazuo Ueda stated that the central bank’s basic stance is to allow market forces to set long-term interest rates. Investors are also looking ahead to Japanese wage and household spending data due this week, which could influence the outlook for domestic monetary policy.
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