India GDP lower than expected

The Indian rupee managed to see some gain v/s the US dollar after Asian peer and European
currencies rose against the US dollar. However, a lower than expected Indian GDP capped any
major rise in the domestic currency. The USDINR June future on MCXSX closed the session at
45.2425, off 3 paisa. It fell to 45.17 during the morning session.
Indian government data showed, economy grew 7.8% in the January-March period, its slowest pace
in five quarters, dragged by weaker mining and manufacturing output. It widely missed the median
estimate of 8.2%.Despite a weaker than expected, local shares rallied on expectation of resolve in
Greece public debt issue as it has been driving global market lower from past few sessions. The
benchmark NIFTY gained 87.05 points, or 1.59%, to close at 5,560.15.
In European currencies, euro and pound gained v/s the Indian rupee. The EURINR June future
closed the session up 45 paisa at 65.07 and the GBPINR June contract at 74.56, up 7 paisa. The Euro
rose in the overnight market on hopes of fresh bailout package for Greece. The EURUSD rose to
1.4424 during New York session yesterday and currently trading above 1.44 levels in Asia. The
GBPUSD has corrected a bit from 1.65 levels and currently slightly above 1.6450 levels.
The CPI data from EU yesterday did not give much support to Euro while it still suggest rate hike by
ECB in July. Based on preliminary figures, EU inflation is expected at 2.7% in May, down from 2.8%
in April. Germany presented a breadth of data Tuesday to underline its strong recovery. Adjusted
unemployment fell to 7.0% in May to less than 3 million unemployed Germans, the lowest rate
since Germany began recording jobless data in 1999, the Federal Labor Office showed.
The US economic data released yesterday was negative for US dollar. Home prices, regional
manufacturing and consumer confidence data had a weaker reading yesterday.
In recent Chinese data, Manufacturing PMI decreases to 51.6 in May from 51.8, almost in line with
expectation by market. However, local shares may struggle on the backdrop of weak Chinese data.