May 31, 2024
New Delhi, India
Daily Currency Market Analysis
USDINR
The Indian Rupee traded in the range of 83.14 to 83.64, closing lower due to persistent dollar demand from importers and election-related risks. S&P Global Ratings reaffirmed India’s sovereign credit rating to ‘positive’ from ‘stable,’ which provided some support to the currency. However, expectations for the extent of Federal Reserve rate cuts in 2024 have declined, adding pressure on the rupee.
EURINR
The Euro traded within the range of 90.18 to 90.62, closing at 90.40. The currency remained steady as surging bond yields and hawkish signals from the US Federal Reserve impacted market sentiment. The GfK Consumer Climate Indicator for Germany rose to -20.9 heading into June 2024, suggesting a slight improvement in consumer confidence. Additionally, Fed’s Kashkari indicated the possibility of further rate hikes if inflationary pressures resurface, which weighed on the Euro.
GBPINR
The British Pound traded between 104.48 and 105.06, closing at 104.77. Initially, GBP surged due to a weaker dollar following softer US inflation data, which supported the view that the Fed might cut rates in September. However, fresh US economic data and hawkish remarks from the Fed reignited worries about the timing of rate cuts. UK retail sales fell by 2.3% month-over-month in April 2024, and a soft inflation outlook could prompt the Bank of England to start unwinding higher interest rates.
JPYINR
The Japanese Yen ranged from 53.03 to 53.73, ending at 53.37. The Yen weakened as BoJ’s Seiji Adachi emphasized the potential consequences of frequent changes in monetary policy. Japan’s Finance Minister Suzuki highlighted the importance of stable currency movements that reflect economic fundamentals. BoJ Governor also noted that progress has been made in moving away from zero and raising inflation expectations, contributing to the Yen’s volatility.
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