USDINR: Inflation Confidence and Market Reactions

U.S. economy

New Delhi, India

September 11, 2023

USD/INR: Inflation Confidence Affects Dollar

Inflation Confidence Affects Dollar US Treasury Secretary Janet Yellen, returning from the G20 Summit, expressed growing confidence that the US can contain inflation without significant damage to the job market. She noted that every measure of inflation is trending downward and that the recent increase in the US unemployment rate wasn’t driven by large-scale layoffs. However, the US Dollar Index is down 0.28% at 104.81, as markets seem unfazed by Yellen’s remarks.

Key support levels are 83.00 and 82.80 and resistance levels are anticipated at 83.30 with further resistance at 83.50.

GBP/INR: Cracks Appear in BoE Tightening Story

The Bank of England (BoE) has received favorable news regarding price expectations from the corporate sector, leading to a reassessment of the BoE’s tightening cycle. Market expectations for the policy rate peak have moderated, with GBP/INR potentially encountering resistance at 104.00 and 104.30, while finding support around 103.50 and 103.20.

EUR/INR: Oil and Natural Gas Impact Euro

Higher oil and natural gas prices are impacting the Euro. LNG workers in Australia went on strike, causing natural gas prices to rise. This development further complicates matters for Europe. As the European Central Bank (ECB) prepares for its meeting this week, the market is pricing in only an 8% chance of rate hikes. There’s speculation that the ECB might raise the main refinancing rate while keeping the deposit rate unchanged, but it may not provide significant support for the Euro. EUR/INR may witness support at 89.00 and 88.80, with resistance at 89.30 and 89.50.

JPY/INR: BOJ Governor Discusses Monetary Policy

Bank of Japan (BoJ) Governor Kazuo Ueda explained the July monetary policy tweak as a mechanism to balance the effects and side effects of monetary easing measures. The BoJ is now focused on achieving a quiet exit to avoid a significant market impact. This news provides insights into the BoJ’s approach to monetary policy, impacting the JPY/INR pair.



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