GBP/INR Exchange Rate Forecast to Strengthen after Slowing UK GDP Fails to Dent Pound
Although pundits were disappointed by the revelation that the UK economy had grown at a slower-than-forecast pace in the third quarter, the Pound Sterling to Indian Rupee (GBP/INR) exchange rate has remained on an uptrend today.
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Pound Sterling (GBP) Turned Bearish after UK Public Borrowing Disappointed Forecasts
While the Rupee (INR) softened on Tuesday in response to a larger-than-expected widening of the domestic Current Account deficit, the Pound Sterling to Indian Rupee (GBP/INR) exchange rate failed to make any particular gains. This was due to the news that the UK’s Public Sector Net Borrowing figure had risen further than forecast, clocking in at 13.6 billion Pounds (GBP) rather than 11.1 billion. As this poor showing does not bode well for Chancellor of the Exchequer George Osborne’s ability to meet the targets set out in his Autumn Statement, investors were inclined to move away from the dented Pound Sterling.
Pound to Indian Rupee (GBP/INR) Exchange Rate Trends Higher Today despite Revision to UK GDP
Despite the GBP/INR exchange rate rallying somewhat overnight, fresh disappointment was in store as the finalised third quarter UK GDP was negatively revised. Growth in the third quarter was found to have slowed to 2.1% rather than 2.3%, a weaker result than pundits had anticipated. Although the domestic economy has continued to outpace its European neighbours this more limited growth is likely to put a further wrench in Osborne’s plans. Following the more dovish comments of Bank of England (BoE) policymaker Martin Weale, a former hawk, this also diminished the odds of a nearer-term interest rate hike in 2016.
However, after November US Durable Goods Orders failed to slump as severely as forecast the Rupee has lacked sufficient support to capitalise on this weaker UK data.
GBP/INR Exchange Rate Forecast: Pound Predicted to Rally on Increased UK Housing Loans
With domestic data largely lacking for both India and the UK throughout the rest of the week the GBP/INR pairing is unlikely to see particularly strong volatility ahead of the Christmas holiday. Tomorrow’s UK BBA Loans for House Purchase report could bolster demand for the Pound, though, as borrowing is expected to have increased on the month in November. As pundits remain somewhat concerned about the presence of a bubble within the domestic housing market, however, the impact of a stronger figure could ultimately prove more limited.
Current GBP, INR Exchange Rates
At the time of writing, the Pound Sterling to Indian Rupee (GBP/INR) exchange rate was making gains around 98.3320, while the Indian Rupee to Pound Sterling (INR/GBP) pairing was unchanged at 00102.