GBP/INR Exchange Rate Surges, USD/INR Forecast to Hold Gains
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate jumped on Thursday as the Rupee recorded widespread declines.
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As well as sliding by over 0.8% against the Pound, the Rupee slumped to an almost one-week low against the US Dollar.
Indian data has been lacking this week but the emerging-market asset was pressured by the tenuous situation in Syria.
With the US sanctioning airstrikes and the UK likely to follow suit, an escalation of the conflict looks all but certain.
In speech given to the United Nations, US President Barack Obama was uncharacteristically aggressive in tone as he asserted that ‘the language of force’ would be the only language ‘understood by killers like this’ and therefore the only possible recourse for defending against ‘this brand of evil.’
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate hit a low of 99.3280
These developments have seen investors turn from higher-risk assets and instead snap up safe-haven currencies like the US Dollar and Yen.
The Rupee’s weakness against the US Dollar was also the result of Wednesday’s unexpectedly impressive US New Home Sales figures. The sharp 18.0% jump in home sales smashed expectations for an increase of 4.4%.
However, while the USD/INR pairing advanced, some industry experts believe the Rupee won’t fall much further. In the opinion of one Mumbai-based currency trader; ‘While the Dollar is gaining globally, the impact on the Rupee hasn’t been too severe and we don’t see much depreciation going forward. India remains one of the preferred destinations for global investors because of attractive carry.’
That being said, if today’s US reports (including Markit Services and Composite PMI) come in above expected levels, the US Dollar could extend its lead on the Rupee.
The Pound was supported against the Rupee by hopes that Bank of England Governor Mark Carney might deliver hawkish comments when he speaks in Wales today.
Although the Confederation of British Industry’s Reported Sales index did show a slowing in sales growth in September (with the index sliding from 37 to 31), the pace was still solid.
Pound Sterling to Indian Rupee Exchange Rate Forecast
If Carney comments on the UK’s outlook and interest rate prospects dovishly the Pound to Indian Rupee could fall in the hours ahead.
The UK’s Average Earnings report may also influence the direction taken by the pairing.
Tomorrow only the UK’s Hometrack Housing Survey is likely to influence GBP/INR volatility, although investors will also be paying close attention to the decision made by the British parliament regarding action in Syria.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate is currently trading in the region of 99.9880
The US Dollar is currently trading against the Rupee in the region of 61.1700
On Friday the Pound Sterling to Indian Rupee (GBP/INR) exchange rate extended gains as concerns regarding a widening of India’s trade deficit grew.
While the British currency was bolstered yesterday by some hawkish comments from Bank of England Governor Mark Carney, the Pound went on to fluctuate modestly against several of its main currency counterparts.
This morning’s UK Hometrack Housing report showed stagnation in September, month-on-month, and an annual increase in house prices of 5.0%.
Today’s Indian foreign reserves figures are unlikely to have much of an impact on the GBP/INR exchange rate.