Foreign Currency Exchange Rates Update: USDINR, GBPINR, EURINR, and JPYINR Show Range-Bound Bias

Get ready to dive into the dynamic world of foreign currency exchange rates! Today, we bring you exciting insights into USDINR, GBPINR, EURINR, and JPYINR. Discover the range-bound bias and uncover the intriguing effects of lower US bond yields, favorable GDP data, and widening yield spreads. Do not miss out on these key factors shaping the landscape of currency trading.

Date: June 01, 2023

Place- New Delhi, India

USDINR: Bias Remains Range Bound, Opening Lower at 82.52/54 Levels

The USDINR Foreign Currency Exchange Rates started the day on a lower note, opening near the level of 82.52/54. This decline can be attributed to lower US bond yields and positive GDP data from India.

Despite weak private consumption, India’s economy experienced a significant surge, with a growth rate of 6.1% in the March quarter. This growth was mainly driven by government and private capital spending.

The full-year growth estimate has been revised from 7% to 7.2%. However, the expansion in eight key infrastructure sectors slowed down to 3.5% in April, the lowest level in six months. Nonetheless, this report is not expected to have a significant impact on the rupee.

Asian Equities Surge, Providing Support for Rupee Appreciation

Asian equities markets have shown strong performance in response to cues from the Caixin/S&P global markets.

China’s contribution to the global manufacturing Purchasing Managers’ Index (PMI) rose to 50.9 in May, surpassing the consensus estimate of 49.5, compared to April’s figure of 49.5.

Additionally, officials from the US Federal Reserve, including the vice chair-designate, have hinted at a pause in interest rate hikes in June.

Consequently, US bond yields have decreased, providing enough catalysts for the rupee to appreciate against the US dollar.

Technical Analysis for USDINR

On the technical front, the USDINR has support levels at 82.40 and 82.20/25, while resistance can be observed between 82.55 and 82.70 levels.

Intraday scalpers are advised to bet against any swings of 15–20 paisa in either direction, with the presence of sufficient stop losses. Although implied volatility has reached record lows, short strangle and short iron fly tactics continue to attract attention from traders.

GBPINR: Pound Expected to Benefit from Widening Yield Spread

The yield spread between UK and US sovereign yields has widened, which is anticipated to support the pound against the dollar.

Both GBPUSD and GBPINR have recovered due to dovish remarks from the previous night made by Fed members, leading to a decline in US bond yields.

However, GBPUSD is likely to encounter resistance in the real-time zone of 1.2450/70. Support levels can be seen at 1.2350/70 and 1.2395/1.2390.

Traders are advised to consider purchasing GBPINR on future declines within the 102.20/35 zone. Market participants should also monitor the GBPINR options on the NSE, which are currently witnessing increased activity.

EURINR: Downward Bias Remains Amidst Influential Economic Data

The release of the JOLTs job openings report for April by the US has not been able to lower US bond yields due to dovish rhetoric from Fed members.

However, the May Consumer Price Index (CPI) statistics from France and Germany had a significant impact on EURUSD. The German inflation index reached its lowest level in a year, while French CPI slowed to 5.1%, falling short of the consensus projection of 5.5%.

Following the European Central Bank (ECB) members’ recognition of the French and German inflation peaks, the likelihood of a rate increase has diminished. Therefore, in the short term, both EURINR and EURUSD are expected to trend weaker.

JPYINR: Declining Trend Continues Amidst Poor Economic Indicators in Japan

Japan experienced an unexpected decline in industrial output during April, as factory production decreased by 0.4% compared to the previous month, failing to meet the consensus estimate of a 1.5% increase.

The JPYINR Foreign Currency Exchange rates are under pressure due to a risky trend and weak economic indicators. Consequently, JPYINR is likely to continue declining in the short term, maintaining a downward bias.

Support and resistance levels for JPYINR futures are estimated to be near 59.30 and 59.00, respectively.

Key Points from CurrencyVeda

To sum up, the USDINR Foreign Currency Exchange rates opened lower at 82.52/54 levels, influenced by lower US bond yields and favorable GDP data from India.

Despite weak private consumption, India’s economy experienced a growth surge of 6.1% in the March quarter due to government and private capital spending. However, the expansion in key infrastructure sectors slowed in April.

Asian equities markets surged, supporting the rupee’s potential appreciation, driven by positive cues from the Caixin/S&P global markets and hints of a rate pause by US Federal Reserve officials. Technical analysis suggests support levels at 82.40 and 82.20/25, with resistance between 82.55 and 82.70.

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