Rupee Holds Steady: USDINR, EURINR, GBPINR, and JPYINR Analysis

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May 14, 2023

New Delhi, India

Currency Market Updates

USDINR: Rupee Stable Amid Central Bank Intervention Expectations

The Indian Rupee (INR) remained stable against the US Dollar (USD) with a trading range of 83.49-83.59. The rupee closed flat as expectations of the central bank’s intervention mitigated the pressure from dollar demand. The rupee closed at 83.55 yesterday. Additionally, nearly $2 billion has been withdrawn by overseas investors from Indian equities in May, adding to the rupee’s pressure. Investors are also closely monitoring U.S. inflation data to gauge the Federal Reserve’s potential policy easing timeline.

EURINR: Euro Strengthens on Reconsidered Rate Cut Expectations

The Euro (EUR) strengthened against the Indian Rupee (EURINR), with a trading range of 89.58-90.2. The euro closed at 90.13 yesterday. Investors reconsidered their expectations for interest rate cuts by key central banks. A significant decline in Eurozone inflation has allowed European Central Bank (ECB) policymakers to contemplate rate cuts, with the ECB projected to initiate these cuts in their upcoming meeting on June 6.

GBPINR: Pound Sterling Gains on Strong Economic Data

The British Pound Sterling (GBP) gained against the Indian Rupee (GBPINR), with a trading range of 104.99-104.56. The pound closed at 104.87 yesterday. Traders reacted positively to robust economic data, which showed that the UK economy grew by 0.6% in Q1 2024, surpassing expectations and emerging from a recession. The Bank of England (BoE) now forecasts a 0.5% expansion for the year, up from its previous forecast of 0.25% in February.

JPYINR: Yen Steadies Amid BOJ Intervention Signals

The Japanese Yen (JPY) stabilized against the Indian Rupee (JPYINR), with a trading range of 53.68-54.40. The yen closed at 53.44 yesterday. The yen steadied following verbal intervention and hawkish comments from Bank of Japan (BOJ) Governor Kazuo Ueda, who emphasized that the central bank would scrutinize the yen’s recent weakness when guiding monetary policy. Despite this, Japan’s services sentiment fell to its lowest level in nearly two years.

In summary, the Indian Rupee maintained stability against major currencies amidst expectations of central bank intervention and economic data assessments. Traders are keeping a close watch on central bank actions and global market dynamics for future currency movement insights.

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