GBP/INR and GBP/EUR Exchange Rates Forecast to Experience Volatility this Week
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The Rupee did strengthen against the US Dollar and advance on several of its other most-traded currency counterparts after India posted impressive economic growth in the three months through June.
The nation’s economy expanded by 5.7% in the second quarter of the year on a year-on-year basis, the most impressive pace of quarterly growth recorded since early 2012. The data, which was published on the 29th of August, lent the Rupee support, but gains were a little limited as the Ukraine-inspired risk-off environment continued.
On Monday the Rupee also fluctuated modestly in response to India’s HSBC Manufacturing PMI. The report detailed a tenth month of continuous improvement in the sector, although the level of employment did slip slightly.
Input costs climbed, but the rate of cost inflation slowed.
India’s HSBC Manufacturing PMI came in at 52.4 in August, down from the reading of 53.0 recorded in July.
In a statement issued with the figures HSBC Researcher Frederic Neumann commented; ‘Manufacturing activity moderated following a spurt the previous month. Output and new orders slowed slightly in August, but remained robust relative to their 12-month history. The mood remains positive too, with firms accumulating inventory in response to stronger demand. However, price pressures remain elevated, despite the slight deceleration seen in input prices. This is likely to keep the central bank guarded against inflation risks, particularly from the pick-up in demand.’
The Pound to Indian Rupee (GBP/INR) exchange rate hit a high of 100.6300.
The GBP/INR exchange rate also experienced some movement in response to the UK’s own Manufacturing PMI, which disappointed expectations by falling by more than economists had anticipated.
The gauge slid from 54.8 to 52.5. A reading of 55.1 had been projected.
The Pound to Euro (GBP/EUR) exchange rate moved between a high of 1.2668 and a low of 1.2631 on Monday as investors responded to some final revisions to Manufacturing PMI for the Eurozone and its largest economies.
Manufacturing PMI for Germany and the Eurozone as a whole was negatively revised, although the indexes did manage to hold above the 50 mark separating growth from contraction.
The French measure remained in contraction territory but did come in at 46.9 rather than 46.5.
Earlier in local trading it was confirmed that the German economy contracted by -0.2% in the second quarter of the year.
The report adds to concerns that the strength of the Eurozone’s largest economy might be failing.
Pound Sterling to Indian Rupee Exchange Rate Forecast
Indian data to be aware of over the rest of the week includes HSBC’s Services PMI, which is forecast to have declined from 52.2 to 50.6 – still holding above the 50 mark separating growth from contraction.
India’s Foreign Reserves, deposit growth and bank loan growth reports will also be of interest.
That being said, volatility in the Pound Sterling to Rupee exchange rate is more likely to be triggered by the UK’s news – including the Bank of England’s interest rate decision and 12 month inflation expectations.
The BoE is unlikely to make any adaptations to fiscal policy, but if the rest of this week’s UK fundamentals impress, more members of the Monetary Policy Committee might be persuaded to vote in favour of an interest rate hike.
The Pound Sterling to Indian Rupee exchange rate hit a low of 100.3000.