GBP/INR Exchange Rate Declines to Monthly Low on Oil Bear Market
With global oil prices crashing close to a four-year low, the Pound to Indian Rupee exchange rate has dropped to its lowest level for a month. A disappointing set of Indian economic data has done little to stymie gains.
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The Pound Sterling to Indian Rupee exchange rate is currently trending in the region of 98.1960.
Sterling was subject to minimal volatility on Thursday as investors focussed on high-yielding assets amid improved risk appetite. A slight declination can be attributed to the House Price Balance which fell beyond the median market forecast of a drop from 39% to 36%, with the actual data declining to 30%.
Those invested in the Indian Rupee would have been pleased to see the US Dollar fall from its chart-topping perch. The publication of dovish minutes from the most recent Federal Reserve FOMC meeting initiated a significant US Dollar depreciation. Emerging market and risk-correlated assets appreciated in the wake of a soft ‘Buck’ (USD).
The Pound Sterling to Indian Rupee exchange rate has dropped to a low today of 98.1040.
Friday has seen a complete reversal of trader risk appetite after a report from the International Monetary Fund suggested that excessive risk taking on global markets could initiate a fresh financial crisis. ‘Accommodative policies aimed at supporting the recovery and promoting economic risk taking have facilitated greater financial risk taking,’ the IMF said.
However, trader risk aversion hasn’t had an effect on the Indian Rupee after global oil prices tumbled to a near 4-year low. ‘We look to be in a capitulation phase in the oil market where investors are acquiescing to the reality of the supply overhang,’ Ric Spooner, a chief strategist at CMC Markets in Sydney, said by phone today. ‘The trigger was the news that Saudi Arabia was cutting prices. We’re certainly into the region where OPEC may consider acting.’
Indian data has been relatively negative on Friday although it hasn’t been enough to micrify the gains from low oil prices. Industrial production matched the previous figure despite having been forecast to increase, and manufacturing declined from the previous score. Additionally foreign reserves fell from 314.20 billion to 311.43 billion.
The issues regarding oil prices have had a negative effect on the Pound. A decline in construction output has also compounded Stirling depreciation. Positive trade balance data hasn’t been enough to quell negative sentiment or overshadow the loss in exports due to low oil prices.
Forecast for the Pound to Indian Rupee Exchange Rate
With global oil prices seemingly a long way from recovery it is likely that the Pound will continue to depreciate against the Indian Rupee. The speeches from the Bank of England policymakers may provoke volatility, but with an unchanged bank rate and no additional stimulus measures it is unlikely that they will reveal anything new.