Daily Digest Market Movers: Indian Rupee strengthens, potential upside seems limited
- The RBI’s Monetary Policy Committee (MPC) voted by a 4-2 majority to leave policy rates unchanged and decided to maintain its ‘Withdrawal of Accommodation" stance.
- The Indian central bank retains the real Gross Domestic Product (GDP) growth projection for FY25 at 7.2%, with "risks evenly balanced," and maintains the Consumer Price Index (CPI) inflation forecast for FY25 at 4.5%.
- RBI Governor Shaktikanta Das said that inflation is receding gradually across economies, while medium-term global growth faces significant challenges. However, food price pressures cannot be ignored due to their potential spillover effects.
- RBI’s Das further stated that it was premature to discuss the recession in the US, but the central bank will monitor all incoming data, both domestic and external.
- The number of Americans filing new applications for unemployment benefits increased by 233,000 for the week ending August 3 versus 250,000 prior (revised from 249,000). This figure came in below the market consensus of 240K, according to the US Department of Labor (DoL) report on Thursday.
- Investors pare bets the Fed will start cutting interest rates in September with a bigger-than-usual 50 basis points (bps) reduction to nearly 58% odds, down from 70% before the data release, according to the CME FedWatch Tool.
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