Currency Market analysis: Rupee Stable Against Dollar

Post Market Currency Update

November 3, 2023

New Delhi, India


The USD/INR pair navigated through a range of ₹83.20 to ₹83.32 in the previous session, closing at ₹83.2675, marking a slight decrease of -0.09%. The Rupee stumbled to a record low, primarily driven by robust demand for the US dollar, exacerbated by high US yields before the Federal Reserve’s interest rate decision. Additionally, the S&P Global India Manufacturing PMI unexpectedly dropped to 55.5 in October, indicating a softening in the manufacturing sector.


EURINR observed a range of ₹88.19 to ₹88.59 and closed at ₹88.5775, showcasing a rise of 0.75%. The Euro faced pressure amid general dollar strength, with expectations of sustained high-interest rates by the Federal Reserve. Economic data for the Euro Area showed a 0.1% contraction in the economy during Q3 2023, falling below market expectations. Moreover, Eurozone inflation is on a swift descent while the economy began contracting.


GBP/INR traded between  101.30 and ₹101.55, concluding at ₹101.5500, reflecting a 0.41% increase. The British Pound experienced a decline as deteriorating UK economic indicators reinforced market speculation about the Bank of England maintaining interest rates. The S&P Global/CIPS UK Manufacturing PMI was revised to 44.8 in October, indicating a contraction in the manufacturing sector. Notably, British lenders in September approved the fewest number of home loans since January.


The JPY/INR pair oscillated between ₹55.35 and ₹55.52, closing at ₹55.4525, displaying a rise of 0.39%. The Japanese Yen depreciated as the Bank of Japan’s strategy to loosen its grip on long-term rates was deemed insufficient to bridge the interest rate gaps. The BOJ held its policy rate steady at -0.1% and maintained the 10-year JGB yield target at around 0%. Consumer confidence in Japan rose to 35.7 in October 2023 from September’s six-month low of 35.2.