October 15, 2024
New Delhi, India
Currency Market Analysis
USDINR
- Trading Range: 84.09 – 84.15
- Closing Price: 84.12
The Indian Rupee slipped as it was dragged down by a fall in most Asian currencies and strong dollar demand from foreign banks. India’s wholesale prices increased by 1.84% year-on-year in September 2024, adding to the currency’s weakness as inflationary pressures intensified. Meanwhile, foreign exchange reserves held by the Reserve Bank of India (RBI) dropped to $701.2 billion, down from the record-high of $704.9 billion in the previous week, keeping the rupee under pressure.
EURINR
- Trading Range: 91.76 – 92.22
- Closing Price: 91.98
The Euro weakened as the US dollar gained strength amid market expectations that the Federal Reserve will ease borrowing costs at a slower pace than previously anticipated. The European Central Bank (ECB) is expected to lower the deposit rate by 25 basis points at its meeting next week, following similar cuts in September and June. Germany’s current account surplus narrowed to €14.4 billion in August 2024, the smallest since May 2023, reflecting weaker trade activity in Europe’s largest economy.
GBPINR
- Trading Range: 109.61 – 110.03
- Closing Price: 109.80
The British Pound traded flat despite data showing that Britain’s economy returned to growth in August, with economic output rising by 0.2% month-on-month. However, markets remain cautious as traders expect the Bank of England (BoE) to cut rates by 25 basis points in one of its remaining meetings this year, with around a 40% chance of a second rate cut as economic uncertainty continues.
JPYINR
- Trading Range: 56.26 – 56.38
- Closing Price: 56.32
The Japanese Yen weakened as the dollar strengthened on firm expectations that the Federal Reserve will not deliver further supersized rate cuts. Japan’s Reuters Tankan index for manufacturers showed an improvement in sentiment, rising to +7 in October 2024 from +4 in September. However, machine tool orders fell by 6.5% year-on-year, signaling a continued slowdown in the industrial sector.
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