October 4, 2024
New Delhi, India
Currency Market Analysis
USDINR
- Trading Range: 83.88 – 84.16
- Closing Price: 84.02
The Rupee faced downward pressure as rising crude oil prices, driven by escalating geopolitical tensions in the Middle East, pushed the currency lower. This is particularly significant for India, a major oil importer. In addition, the Asian Development Bank (ADB) retained its growth forecast for India at 7% for the current fiscal year. Meanwhile, India’s Manufacturing PMI for September 2024 dipped slightly to 56.5, down from the flash estimate of 56.7, signaling a moderation in the manufacturing sector’s growth.
EURINR
- Trading Range: 92.58 – 93.16
- Closing Price: 92.95
The Euro slipped as geopolitical tensions weighed on market sentiment, and weaker-than-expected inflation data from the Eurozone fueled speculation of additional rate cuts by the European Central Bank (ECB). The HCOB Eurozone Composite PMI was revised higher to 49.6 for September, slightly above the preliminary figure of 48.9, but still indicating contraction in economic activity.
GBPINR
- Trading Range: 109.02 – 112.12
- Closing Price: 111.85
The British Pound weakened following comments from the Bank of England (BoE) Governor, who hinted at the possibility of another rate cut in November, provided inflation continues to ease. The S&P Global UK Services PMI dropped to 52.4 in September from 53.7 in August, reflecting a slowing pace of growth in the services sector. This combination of factors has fueled speculation of a more dovish approach by the BoE going forward.
JPYINR
- Trading Range: 57.18 – 57.98
- Closing Price: 57.65
The Japanese Yen fell after newly elected Prime Minister Shigeru Ishiba suggested it was too soon for an additional rate hike. Japan’s business activity remained expansionary for the eighth consecutive month, though the au Jibun Bank Japan Services PMI was revised lower to a three-month low of 53.1 in September 2024, reflecting some weakening in the services sector. Despite this, the broader economic outlook remains relatively positive for Japan.
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