• Spot rupee closed at 85.64/65 to a dollar level after opening at 85.87/88 level. The rupee rallied today after the RBI sent a positive outlook on the economy and inflation following its 50 bps repo rate cut to 5.5 and 100 bps CRR cut.The RBI’s message appeared that the RBI may be open to more cuts if inflation remains under control. Equity market benchmarks today rose sharply and ended with 0.9 gains.

• DXY is trading higher at 99.01 level ahead of the May labour data from the US. Meanwhile, EURUSD slipped slightly to 1.1420 level, off its six week high of 1.1490, following President Lagarde’s indication that the ECB is approaching the end of its easing cycle. Meanwhile, ECB policymaker Yannis Stournaras told Bloomberg that the Eurozone has achieved a soft landing and that most rate cuts are likely behind us—though uncertainty remains, particularly due to the potential impact of new tariffs.

• Elsewhere, US Treasury called on BoJ to continue policy tightening to support a normalization of Yen and correct bilateral trade imbalances. The statement, part of the Treasury’s semiannual currency report, suggested Tokyo had more to do on the policy front.

• However, Japan’s Finance Minister Katsunobu Kato offered a restrained response, reiterating that monetary decisions lie with the BOJ and avoiding direct comment on the US call for further tightening. Yen, meanwhile, barely reacted, continuing its technical consolidation as it drifts slightly lower against Dollar.

• On the data front, German and French Industrial Output for April shrank 1.4 worse than market forecasts. For the Eurozone as a whole, Retail sales were up 0.1 m/m, below market forecasts. However, Q1 GDP was revise higher to show a 0.6 q/q growth compared to preliminary estimates of 0.2 q/q growth.

• Important data releases scheduled today: US: Non Farm Payrolls ; Unempl rate; Average Hourly Earnings.

Rupee opened marginally lower at 85.87 levels compared to its previous close of 85.81 levels.

DXY is trading lower at 98.78 level. US dollar index extended its decline on Thursday, its lowest level since April 21, as a fresh batch of economic data deepened concerns about the US economic outlook.Weekly jobless claims rose to 247K in the final week of May—the highest since early October 2024 and above expectations of 235K further signaling potential softening in the labor market.