Indian Rupee (INR) Exchange Rate Stronger against Sterling, USD/INR Hits Two-Week Low
The Indian Rupee was able to maintain a stronger relationship with the British Pound on Wednesday as the British asset edged away from recent highs amid a lack of influential domestic reports.
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Sterling softened across the board on Tuesday as UK mortgage approvals data fell short of forecasts, adding to the case for the Bank of England leaving interest rates at record lows for the foreseeable future.
The Pound held these declines against peers like the Rupee as the week continued.
However, the Indian asset slumped to a two-week low against its US counterpart as reports of increased Dollar buying by companies wore on the Rupee.
It appears that businesses are escalating their Dollar purchases in order to meet end of the month payments for overseas shipments.
The Reserve Bank of India also adjusted a restriction on the amount of foreign currency importers are able to purchase in the onshore forwards market, doubling the limit and increasing demand for the US Dollar.
In the opinion of currency strategist Amogh Moghe; ‘Dollar buying by oil and gold importers is pressuring the Rupee. The easing of rules for importers by the Reserve Bank of India has also pushed Dollar demand higher’.
The Rupee did manage to trim declines against the US Dollar before the close of local trading. As one dealer noted; ‘The Rupee had weakened in the morning but since then we have seen good inflows. However, dollar demand from nationalised banks has prevented the Rupee from rising further.’
Tuesday’s unexpectedly strong US durable goods and services PMI data also kept the ‘Greenback’ trading slightly higher against its Indian rival.
However, the Rupee held gains against the Pound as the UK’s CBI reported sales figure for May came in at 16, down from 30 in May and considerably shy of the forecast of 35.
Nationwide also issued statements asserting that it expects London’s buoyant housing market to cool.
House prices in the UK’s capital city have surged over the last year, but Nationwide officials believe that prices could start to taper in the next few months.
Indian data is thin on the ground until Friday when the nation’s foreign reserves, deposit growth, bank loan growth and GDP growth rate figures will be released.
Today’s US MBA mortgage applications report could have a modest impact on the USD/INR exchange rate.
The British Pound is currently trading against the Indian Rupee in the region of 98.7635.
The US Dollar is currently trading against the Indian Rupee in the region of 58.9800.