Indian Rupee (INR) Exchange Rate Heading for 0.7% Five-Day Drop
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The emerging market asset started April in a stronger position against several of its currency counterparts as investors bet that the Indian election would end with an economically-supportive coalition government.
However, speculation that importers have bought an increasing number of US Dollars in order to meet end of month payments has lessened the Rupee’s appeal and the currency dipped against counterparts like the British Pound and US Dollar.
Since markets reopened following the Easter break the Rupee has shed 0.7 per cent against the US Dollar.
According to industry expert Pramit Brahmbhatt; ‘Indian equity is also expected to trade weak which will force Rupee to depreciate further coupled with the month-end Dollar demand from the oil importers.’
The GBP/INR exchange rate was slightly softer on Friday even after UK retail sales data showed a slight increase in March.
After UK growth data is released next Tuesday, the GBP/INR pairing could experience a reversal of fortunes. The Bank of England expects the UK economy to have expanded by 1.0 per cent in the first quarter of the year.
Next week the Rupee could fluctuate in response to India’s HSBC manufacturing PMI and foreign reserves data.
However, investors will also be taking a keen interest in the US non-farms payrolls report. If the employment figures disappoint, increasing the odds of the Federal Reserve keeping fiscal policy accommodative, emerging-market currencies like the Rupee may advance.
The British Pound is currently trading against the Rupee in the region of 101.8360.
The US Dollar is currently trading against the Rupee in the region of 60.7700.