Rupee Holds Steady Amid Expectations of RBI Intervention: USDINR, EURINR, GBPINR, and JPYINR Analysis


May 10, 2023

New Delhi, India

Daily Currency Market Analysis

USDINR: Rupee Stabilizes Amid Expectations of RBI Action

The last traded price of USDINR was 83.46.

The Indian Rupee (INR) maintained stability against the US Dollar (USD) today, with a trading range of 83.5-83.62. Market sentiment remained subdued as traders anticipated intervention from the Reserve Bank of India (RBI) to limit sharp weakness in the rupee. Additionally, dollar-rupee forward premiums increased, with the 1-year implied yield reaching its highest level in nearly two weeks. India Ratings’ upward revision of India’s GDP growth estimate for FY25 to 7.1% provided further support to the rupee.

EURINR: Euro Declines on Global Cautiousness

The last traded price of EURINR was 89.99.

Conversely, the Euro (EUR) witnessed a decline against the Indian Rupee (EURINR), with a trading range of 89.61-90.11. Global markets adopted a cautious stance as investors continued to assess economic and interest rate outlooks. Despite Eurozone Retail Sales marking a significant increase in March, German industrial production declined month-over-month in March 2024, contributing to the euro’s downturn.

GBPINR: Pound Sterling Falls Ahead of BoE Announcement

The last traded price of GBPINR was 104.54.

The British Pound Sterling (GBP) depreciated against the Indian Rupee (GBPINR), with a trading range of 103.96-104.94. Market sentiment soured as traders fully priced in two quarter-point rate cuts by the Bank of England (BoE) this year. Comments from Federal Reserve’s Kashkari about potential rate cuts if inflation eases added to the cautious atmosphere. The BoE is expected to maintain the interest rate at 5.25% at its upcoming May meeting.

JPYINR: Yen Weakens Despite Warnings

The last traded price of JPYINR was 53.70.

The Japanese Yen (JPY) weakened against the Indian Rupee (JPYINR), with a trading range of 53.78-54.36. Despite repeated warnings from Japanese authorities against extreme currency movements, the yen continued to depreciate. Finance Minister Suzuki reiterated the readiness of authorities to respond to excessive foreign exchange volatility, while Bank of Japan Governor Kazuo Ueda emphasized studying the impact of yen moves on inflation for guiding policy decisions.