May 22, 2024
New Delhi, India
Daily Currency Market Analysis
USDINR
- Trading Range: 83.38 – 83.23
- Closing Price: 83.31
- The Indian Rupee closed flat, buoyed by likely intervention from the Reserve Bank of India (RBI) and broad-based interbank dollar sales. The recent surging levels of the rupee comes amidst positive economic projections, with Moody’s forecasting a 6.6% expansion for India’s economy in FY25. Additionally, India’s unemployment rate dipped to 6.7% in the March quarter, further supporting the Rupee.
EURINR
- Trading Range: 90.59 – 90.31
- Closing Price: 90.42
- The Euro dropped after European Central Bank (ECB) official Isabel Schnabel urged caution regarding rate cuts beyond June. The annual inflation rate in the Euro Area remained stable at 2.4% in April 2024, matching March’s figure. Market forecasts predict 68 basis points (bps) of ECB rate cuts and 46 bps for the Federal Reserve in 2024, contributing to the Euro’s decline.
GBPINR
- Trading Range: 106.03 – 105.74
- Closing Price: 105.90
- The British Pound experienced fluctuations, initially surging due to a weaker dollar after softer US inflation data suggested the Federal Reserve might cut rates in September. However, it later dropped following statements from multiple Fed officials hinting at the possibility of maintaining elevated interest rates for an extended period. Additionally, UK employment data indicated deteriorating job market conditions for the third consecutive month. The possibility of a rate cut by the Bank of England in June has increased to 50%, with traders anticipating two quarter-point cuts by year-end.
JPYINR
- Trading Range: 53.42 – 53.22
- Closing Price: 53.31
- The Japanese Yen weakened, facing renewed pressure after the Bank of Japan (BOJ) maintained its bond-buying amounts at the same level as the previous operation. BOJ Governor Kazuo Ueda stated that there are no immediate plans to sell the central bank’s ETF holdings. Furthermore, Japan’s economy contracted at an annualized rate of 2% in the first quarter of 2024, adding to the Yen’s woes.
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