Currency Market Update June 18, 2024: Key Drivers and Forecasts for USDINR, EURINR, GBPINR, and JPYINR


June 18, 2024

New Delhi, India

Daily Currency Market Update


Trading Range: 83.52-83.62

The Indian Rupee closed nearly unchanged, as the pressure from dollar demand by local corporates was offset by dollar offers from state-run banks. In the US, factory gate prices declined by 0.2% in May, contrary to market expectations of a 0.1% increase. Additionally, the annual inflation rate fell to 3.3% in May, below the April forecast of 3.4%.


Trading Range: 90.07-90.37

The Euro recovered as immediate concerns over the political situation in France eased. In Germany, wholesale prices shrank by 0.7% year-on-year in May 2024, an improvement from the 1.8% fall in the previous month. However, industrial production in the Euro Area declined by 0.1% month-over-month in April 2024, reflecting ongoing economic challenges.


Trading Range: 106.65-105.72

The British Pound surged due to a weaker dollar, driven by softer US inflation data which reinforced expectations of the Federal Reserve’s first rate cut in September. The Bank of England (BOE) is expected to keep rates unchanged next week, with traders anticipating a rate cut in August or September. The RICS UK Residential Market Survey showed the house price balance fell to -17 in May 2024 from -7 in April, indicating a cooling housing market.


Trading Range: 53.25-53.55

The Japanese Yen remained within its trading range as caution prevailed ahead of the Bank of Japan’s policy decision. BOJ Governor Kazuo Ueda reaffirmed the central bank’s plan to gradually scale back its large balance sheet, though the timing remains uncertain. Meanwhile, the business survey index of large manufacturing firms in Japan shrank by -1.0% in Q2 of 2024, highlighting challenges in the manufacturing sector.

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