Indian Rupee (INR) Exchange Rate Brushing One-Month High
While the Indian Rupee achieved a one-month high against the US Dollar as a result of domestic election expectations, the emerging-market asset trimmed its advance before the close of local trading.
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However, although the Rupee edged away from recent highs, it was trading above 60 per Dollar as investors speculated on the content of Federal Reserve Chairwoman Janet Yellen’s upcoming speech.
It is expected that Yellen will reiterate the fairly dovish stance adopted at the last Federal Open Market Committee meeting.
If that proves to be the case the Rupee could recover losses and hit fresh one-month highs against the ‘Greenback’.
According to currency and money market expert Paresh Nayar; ‘There is huge Dollar-buying interest from state-owned banks as the Rupee approaches the 60 level. The Dollar’s weakness against peers ahead of Yellen’s testimony has supported the Rupee.’
Meanwhile the Rupee remained softer against the Pound as the British currency clung to yesterday’s broad-based gains.
Sterling continues to enjoy a bullish relationship with several of its most traded currency peers as a result of yesterday’s unexpectedly impressive UK service sector data.
The British services sector expanded more rapidly than forecast in April as the nation’s economy continued to go from strength to strength at the beginning of the second quarter.
As well as maintaining a stronger position against the Rupee the Pound was close to its highest level against the US Dollar since mid 2009.
The GBP/EUR exchange rate was trading in the region of a nine week high.
In the opinion of senior foreign exchange strategist Peter Kinsella; ‘The Pound continues to trade at reasonably robust levels and should continue doing so.’
This recent piece of above-target UK data could be the final prompt the Bank of England needs to bring forward its timeline for raising interest rates.
While the BoE is expected to leave interest rates at record lows and fiscal policy unaltered when it meets tomorrow, a more hawkish attitude could be enough to push the Pound higher.
Further GBP/INR fluctuations could occur before the weekend due to UK trade balance, manufacturing and industrial production data.
Indian economic data is thin on the ground this week, but next week investors will be focusing on trade balance figures, manufacturing/industrial production data and India’s inflation report.
The British Pound is currently trading against the Indian Rupee in the region of 101.9730.
The US Dollar is currently trading against the Indian Rupee in the region of 60.0500.