Pound to Indian Rupee (GBP/INR) Exchange Rate News – Rupee softer before UK growth figures

The Rupee began the local session little-changed against its US counterpart as investors focused on today’s US non-farm payrolls report and speculated on whether the figures would support or undermine the Federal Reserve’s decision to continue tapering stimulus.

Emerging-market assets were given a little boost yesterday as Mexico’s credit rating was raised to its highest ever level by Moody’s Investors Service, and according to Joel Rebello of Live Mint, the Rupee was supported further by a successful government auction of telecom spectrum.

Although the Rupee spent much of the second half of last year falling to fresh record lows against its US counterpart, the currency’s movement has been far more restrained in recent weeks.

While this is partly due to the Federal Reserve’s tapering of stimulus being priced into the market, it’s also because the Reserve Bank of India has taken decisive action to temper the asset’s volatility.

In the opinion of industry expert Pierre Faddoul; ‘The fundamental picture has stabilised for India whereas it’s deteriorated for other emerging Asian nations. A more stable macro picture for India is also helping to decrease uncertainty.’

The currency was little-affected by today’s domestic foreign reserves and bank loans growth data.

The reports showed that bank deposits outpaced loan growth for a fifth fortnight in a row.

While the Rupee was holding steady against the US Dollar prior to the publication of today’s influential employment report, the emerging market asset declined against the Pound even as UK industrial output was shown to have increased by less-than-predicted.

Sterling losses were limited as the UK’s trade deficit narrowed sharply at the close of last year. The deficit is now at its narrowest since mid-2012.

Before the end of European trading additional GBP/INR movement could be caused by the UK NEISR GDP estimate for January.

If the British economy is shown to have continued expanding at the impressive pace recorded at the close of last year the Pound could be pushed higher before the weekend.

Next week India’s inflation rate figures, out on Friday the 14th, will be of particular interest.