Despite a lack of demand for the British Pound after Prime Minister David Cameron announced his intention to initiate airstrikes in Northern Iraq, Sterling is holding steady against the Indian Rupee as trader risk aversion softens emerging market currencies.
The Pound Sterling to Indian Rupee exchange rate is currently trending in the region of 99.9440.
Over the past month or so the Pound’s journey has been very volatile. In the build up to the Scottish referendum Sterling plummeted as economists priced in the potential detriment an independent Scotland could have on the Pound. Sterling promptly rebounded following the Unionists victory as a united Britain avoids massive upheaval. The sudden surge in demand for the Pound opened up some appealing selling positions. As traders opted to lock in their profits Sterling was brought back to Earth with a bang and has generally trended lower against the majority of its major peers.
Monday’s British domestic data was, on the whole, disappointing. Public Finances showed an unwanted increase from -9.7 billion to 1.6 billion, although it did avoid the market consensus of a jump to 6.0 billion. Public Sector Net Borrowing indicated that government debt had risen by a significant amount having increased from -1.1 billion to 10.9 billion.
Emerging market currencies have struggled against a bullish US Dollar and the Indian Rupee is no exception. With economic data publications few and far between the Indian Rupee is subject to foreign currency movement and geopolitical developments.
The Pound Sterling to Indian Rupee exchange rate has hit a low today of 99.7550.
With a lack of economic data for both the UK and India on Wednesday the Pound to Rupee exchange rate is unlikely to be subject to much movement.
Negative sentiment towards Sterling has increased after Prime Minister David Cameron said that Britain should fight in Northern Iraq in order to snuff out the risk of terrorism on UK citizens. Speaking on American television Cameron stated; ‘There is no doubt in my mind it has already undertaken and is planning further plots in Europe and elsewhere, specifically in Belgium, in Brussels. It was an Isil plot that went into a Jewish museum [in Brussels] and killed entirely innocent people. And there are other plots they have been attempting including in my own country — in order to kill and maim innocent people. And the same applies to the United States of America. So this is a fight you cannot opt out of’.
As geopolitical tensions continue to mount emerging market currencies are left in favour of safe haven currencies. The Indian Rupee has steadily softened as a result of trader risk aversion tactics.
Forecast for the Pound to Indian Rupee Exchange Rate
On Thursday Bank of England Governor Mark Carney will deliver a speech in Wales. Should the speech have a dovish overtone it is likely that the Pound will extend losses. Those invested in Sterling will be hoping for a hawkish tone in order for the Pound to rebound from its current downtrend.
With an absence of Indian data on Thursday it is likely that the Indian Rupee will continue to soften against trader risk aversion.
Friday’s British economic data will have little effect on Sterling movement, especially against the backdrop of geopolitical tensions. The year-on-year Hometrack Housing Survey hit 5.5% previously.
There will be several economic data publications pertaining to India on Friday. Yearly Deposit Growth, Foreign Reserves and Bank Loan Growth all have the potential to provoke Rupee movement but are unlikely to register too highly against waning risk sentiment.
The Pound Sterling to Indian Rupee exchange rate has reached a high today of 100.1200.
UPDATE
The Pound to Indian Rupee exchange rate advanced by more than 0.35 on Thursday as investors remained wary of higher-risk and emerging market assets in the face of the intensifying situation in Syria.
A lack of economic reports for India could restrict GBP/INR movement in the hours ahead, although the pairing is likely to fluctuate in response to the UK’s Reported Sales and Average Earnings reports.
Sterling could also spike if today’s speech from Bank of England Governor Mark Carney contains dovish elements.
