GBP/INR, GBP/EUR Exchange Rates Hold Gains as Scottish Decision Announced

Both the Pound Sterling to Indian Rupee (GBP/INR) and Pound to Euro (GBP/EUR) exchange rates were trading in a stronger position on Thursday.

GBP/INR Outlook

Sterling has been supported against the majority of its currency counterparts by yesterday’s better-than-forecast economic data for the UK and the still-existing division between Bank of England policymakers on the subject of interest rates.

The Pound might have been feeling the heat in the run up to the potentially life-changing Scottish referendum, but the British currency advanced as the rate of joblessness in the UK fell to a six-year low and average weekly wage growth increased by slightly more than anticipated.

Gains in the GBP/INR exchange rate were also enabled by the Federal Open Market Committee’s interest rate announcement.

Although the Fed maintained a dovish tone on the near-term outlook for interest rate increases, the central bank did upwardly adjust its rate projection for the close of 2015. The appeal of higher-risk and emerging market currencies like the Rupee consequently diminished.

The Rupee dropped against the Pound and fell to a one-month low against the US Dollar.

As stated by currency expert Ankur Jhaveri; ‘The Rupee weakness is because of the Dollar’s strength. Emerging-market currencies are expected to trade under pressure as the Dollar index rises. We expect 61.80 might work as resistance for the Rupee, while support stays at 60.00 levels.’

The Pound Sterling to Indian Rupee exchange rate hit a low of 99.1510.

GBP/EUR Outlook

Meanwhile, the Pound posted a modest gain against the Euro amid a dearth of influential economic reports for the 18-nation currency bloc.

The common currency received some slight support on Wednesday as annual consumer price inflation in the Eurozone came in a little higher than expected, although the figure still remained well below the ECB’s target levels.

However, the Euro came under a little pressure after the European Central Bank’s first Targeted Long Term Refinancing Operation failed to have the desired effect.

Eurozone banks borrowed 82.6 billion Euros in an attempt to improve liquidity in the region. The figure was considerably less than expected and indicates that the steps taken by the ECB might not be enough to encourage renewed economic momentum.

The GBP/EUR exchange rate hit a low of 1.2543.

According to economist Holger Schmieding; ‘It’s a disappointing for the ECB. This makes it more difficult for the ECB to meet its grand claims about the balance sheet. Liquidity does not seem to be the issue at the moment in the Euro area.’

The Pound was little-changed following the publication of UK retail sales figures. While the month-on-month figure exceeded expectations, the year-on-year number was below forecasts.

Pound Sterling to Indian Rupee Exchange Rate Forecast

A lack of market-moving Indian data means that the direction taken by both the GBP/INR and GBP/EUR exchange rates will be dictated by UK news – particularly the outcome of the Scottish referendum.

A ‘No’ vote could see the Pound rally, while a ‘Yes’ vote would significantly undermine demand for the British asset before the weekend.

UPDATED

Both the Pound Sterling to Indian Rupee and Pound Sterling to Euro exchange rates pushed higher on Friday as Scotland’s unsuccessful bid for independence bolstered the British asset.

The Pound climbed against almost all of its peers, although later pared some of its more sizeable gains.

The GBP/EUR exchange rate was little affected by Germany’s producer price report and India’s deposit growth/bank loan growth numbers are unlikely to have much impact on GBP/INR trading.