Currency Market Update June 19, 2024: Rupee Remains Stable Amid Central Bank Intervention


June 19, 2024

New Delhi, India

Daily Currency Market Update


Trading Range: 83.52-83.6

The Indian Rupee closed unchanged, with intervention from the Indian central bank preventing it from hitting a lifetime low. India’s merchandise trade deficit stood at $23.8 billion in May 2024, reflecting ongoing trade imbalances. Dollar-rupee forward premiums rose, with the 1-year implied yield up by 3 basis points to 1.63%.


Trading Range: 88.97-90.37

The Euro dropped, pressured by political uncertainty in France. The European Central Bank (ECB) delivered its first rate cut in five years last week but adopted a cautious approach toward additional cuts. Industrial production in the Euro Area declined by 0.1% month-over-month in April 2024, highlighting ongoing economic challenges.


Trading Range: 106.20-105.66

The British Pound surged due to a weaker dollar after softer US inflation data reinforced expectations of the Federal Reserve’s first rate cut in September. However, the GBP dropped as the dollar rose amid a hawkish Fed stance on the interest rate outlook. According to a BoE survey, UK public inflation expectations for the year ahead dropped from 3.0% to 2.8% in May. Despite this, steady wage growth in the UK has raised concerns about persistent inflation in the services sector.


Trading Range: 53-53.5

The Japanese Yen weakened as the Bank of Japan (BOJ) decided to keep interest rates unchanged in June, as widely expected. The BOJ also announced it would continue buying Japanese government bonds at the same pace decided in March until its next policy meeting in July. On a positive note, Japan’s machine tool orders increased by 4.2% year-on-year to JPY 124,554 million in May 2024.

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