May 21, 2024
New Delhi, India
Daily Currency Market Analysis
USDINR
- Trading Range: 83.50 – 83.26
- Closing Price: 83.30
- The Indian Rupee closed flat against the US Dollar, pressured by dollar demand from local oil companies and likely equity-related outflows. Despite this, the rupee remained stable due to potential interventions by the Reserve Bank of India (RBI). India’s merchandise trade deficit increased to $19.1 billion in April from $15.60 billion in March, and dollar-rupee forward premiums ticked higher, with the 1-year implied yield up by 2 basis points to 1.70%.
EURINR
- Trading Range: 90.71 – 90.31
- Closing Price: 90.54
- The Euro gained as softer-than-expected US inflation data bolstered bets for a September interest rate cut from the Federal Reserve. The Eurozone economy expanded by 0.3% quarter-on-quarter in the first three months of 2024, while industrial production in the Euro Area rose by 0.6% month-over-month in March 2024.
GBPINR
- Trading Range: 105.90 – 105.38
- Closing Price: 105.75
- The British Pound surged due to a weaker dollar after softer US inflation data reinforced the view that the Federal Reserve will deliver its first rate cut in September. Additionally, the possibility of a rate cut by the Bank of England in June has risen to 50%, with traders anticipating two quarter-point cuts by the end of the year. However, the UK employment data showed job market conditions deteriorating for the third consecutive month.
JPYINR
- Trading Range: 53.73 – 53.43
- Closing Price: 53.52
- The Japanese Yen strengthened amid a weakening of the dollar, spurred by recent data reinforcing bets that the Federal Reserve will start cutting interest rates in September. However, Japan’s economy contracted by 2.0% in Q1 2024, and its GDP shrank by 0.5% quarter-on-quarter in Q1 2024, compared to market estimates of a 0.4% fall.
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