US Dollar to Rupee (USD/INR) Exchange Rate Fluctuates, GBP/INR Pares Gains
Before the release of the consumer price index for the US, the Indian Rupee was able to break free from its recent run of losses against the US Dollar.
If you're looking to make an international money transfer, we recommend TorFX.
The Indian assert had been struggling against the ‘Greenback’ having shed 1.5 per cent in response to the Iraq-inspired risk-off environment.
But with the Rupee at a seven-week low against its US rival, some investors engaged in profit taking and industry experts intimated that the nation’s exporters are repatriating earnings and boosting the Rupee in the process.
The Rupee briefly achieved a high of 60.0200 against the US Dollar, having previously fallen to 60.5100.
One locally-based currency expert asserted that rising local stocks supported the Rupee, and that the asset ‘reversed the losses as exporters were seen selling Dollars’.
However, the Rupee’s resurgence proved short lived and the USD/INR pairing pushed higher after the pace of inflation in the US was shown to have advanced in May.
The US consumer price index was expected to climb by 0.2 per cent in May, month-on-month, but it actually increased by 0.4 per cent. On the year the CPI came in at 2.1 per cent last month, up from a reading of 2.0 per cent in April.
The stronger-than-expected increase in consumer prices in the world’s largest economy added to the case for the Federal Reserve considering an interest rate hike sooner rather than later and comes just before the Federal Open Market Committee delivers its latest policy decision.
The USD/INR exchange rate continued trending higher as the level of housing starts in the US fell by more than anticipated. The 6.5 per cent month-on-month drop in starts was almost double the decline forecast by industry experts and almost matched a drop in building permits in the same month.
The GBP/INR exchange rate, meanwhile, was little-changed following the publication of the UK’s consumer price index.
Although the rate of inflation in the UK unexpectedly eased to a 4 ½ year low in May, giving the Bank of England more wiggle room when it comes to leaving interest rates on hold, the leading comments issued by several major central bank officials outweighed the adverse impact of the data and left the Pound riding high against its peers.
David Miles, a traditionally dovish member of the Monetary Policy Committee, recently followed in the footsteps of BoE Governor Mark Carney and Deputy Governor Charlie Bean, by hinting that an interest rate increase could occur in the near future.
Although Miles put the odds of an interest rate hike occurring this side of Christmas at just 1/10, other industry experts are more hawkish and see an increase in borrowing costs being announced in November.
This week is extremely light in terms of pertinent economic data for India, so volatility in the Rupee will most likely be occasioned by global economic developments, including the FOMC policy announcement.
The British Pound is currently trading against the Rupee in the region of 102.1030.
The US Dollar is currently trading against the Rupee in the region of 60.1950.