Indian Rupee (INR) Exchange Rate Recovers Losses against Sterling, US Dollar
On Thursday the USD/INR and GBP/INR exchange rate pairings edged lower as the Indian Rupee recovered recent losses.
If you're looking to make an international money transfer, we recommend TorFX.
While India’s election result helped the Rupee achieve multi-week and multi-month highs against its rivals last week, the emerging market asset shed gains over the last two days.
News that the Bharatiya Janata Party took the majority with 282 seats and ousted the heavily criticised Congress Party pushed the Rupee to an 11-month high against the US Dollar and supported it against the majority of its other currency rivals.
But the Rupee slipped against peers like the Pound and US Dollar in response to profit taking and global economic slowdown fears.
However, during local trading improved risk appetite helped the Rupee recover ground.
Investors turned to emerging-market and higher-risk assets in response to a stronger-than-expected manufacturing report for China.
China’s manufacturing gauge stayed below the 50 mark separating growth from contraction in May but did rally from 48.1 to 49.7.
Mumbai-based currency expert Paresh Nayar noted; ‘The currency has advanced on the back of Chinese data and also as we are seeing good buying in local stocks and debt by foreign institutional investors. The continued euphoria of a majority win by a single party in India is also benefiting the Rupee.’
Meanwhile, the dovish Federal Open Market Committee meeting minutes (while expected) did serve to push the US Dollar lower and boost currencies like the Rupee.
The minutes showed that US policymakers are divided on their assessment of the UK labour market and that interest rates will remain below the historical average long after the tapering of stimulus has finished.
They stated; ‘Participants generally agreed that starting to consider the options for normalisation at this meeting was prudent as it would help the committee to make decisions about approaches to policy normalisation and to communicate its plans to the public well before the first steps in normalising policy become appropriate.’
During European trading the Rupee extended gains against the Pound as the UK posted a larger-than-forecast budget deficit in April.
Separate UK reports confirmed that the nation’s economy expanded by 0.8 per cent in the first quarter of the year.
With economic reports for India lacking, any Rupee movement is likely to occur as a result of US news – including the nation’s manufacturing report.
The British Pound is currently trading against the Rupee in the region of 98.7253.
The US Dollar is currently trading against the Rupee in the region of 58.4900.