Pound Sterling to Indian Rupee Exchange Rate Forecast: GBP/INR Slumps as UK Construction Disappoints Predictions
The UK’s construction sector was found to have grown at its slowest level in seven-months today and the GBP/INR exchange rate has been on a strong downtrend ever since, despite better US data weighing on the Rupee (INR).
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Rupee (INR) Bolstered as RBI Held Interest Rates and US Manufacturing Contracted
Although yesterday’s Bank of England (BoE) stress test saw all of the seven major banks examined pass the Pound (GBP) was not able to capitalise on this positive news for long. The persistently dovish tone of BoE policymakers helped to weigh Sterling down, with the odds of an early 2016 interest rate rise appearing to recede further. This impression was not helped along by a surprisingly large drop in the UK’s latest Manufacturing PMI, which retreated from 55.2 to 52.7 in November.
While the Indian Manufacturing PMI showed a little weakness the Rupee (INR) was nevertheless buoyed on Tuesday as the Reserve Bank of India (RBI) opted to hold interest rates steady at 6.75%. Market risk appetite was also increased by an unexpectedly poor ISM Manufacturing Index, which saw US manufacturing activity enter a state of contraction and dented general confidence in the certainty of an imminent Federal Open Market Committee (FOMC) rate hike.
Pound Currency News: GDP Bearish after UK Construction Fell to Seven-Month Low Today
Sentiment towards the Pound has turned still more bearish today as investors have reacted unfavourably to the revelation that the UK’s Construction PMI had also unexpectedly slipped in November. Despite the more limited contribution that the construction sector makes to the nation’s GDP, the fact that growth has hit a seven-month low has seen Sterling fall significantly out of favour with investors, with the currency slumping sharply across the board today.
A stronger-than-expected ADP Employment Change figure has bolstered the US Dollar (USD) this afternoon, encouraging hopes that Friday’s Change in Non-Farm Payrolls will prove strong and open the door for a December Fed interest rate move. While the ensuing bullishness of the ‘Greenback’ has weighed on emerging-market currencies such as the Rupee this has failed to bolster the softened GBP/INR exchange rate.
GBP/INR Exchange Rate Forecast: Pound Predicted to Rally on Improved UK Services PMI
The latest UK Services PMI stands to provoke volatility for the Pound, with traders increasingly cautious that there could be a third shortfall in economic expansion. As the service sector is the single largest contributor to the UK’s GDP, however, a stronger showing here could prompt a fresh round of Sterling strength.
With a slight dip forecast for India’s Services PMI, the Rupee could return to more bearish form ahead of the weekend, particularly if the odds of a Fed rate hike before the end of the year rise on the back of a solid Non-Farm Payrolls report.
Current GBP, INR Exchange Rates
At time of writing, the Pound Sterling to Indian Rupee (GBP/INR) exchange rate was slumped in the range of 99.4520, while the Indian Rupee to Pound Sterling (INR/GBP) was steady at 0.0100.