UPDATE
The Pound Sterling to Euro (GBP/EUR) exchange rate declined by around -0.3% on Tuesday morning, whilst the Pound Sterling to Indian Rupee (GBP/INR) conversion rate surged by around 0.7%.
As traders await British inflation data, the Pound advanced versus many of its currency rivals. The appreciation can be linked to higher-than-expected sales growth. The forthcoming inflation data is particularly significant because the Bank of England (BoE) highlighted the lack of price pressures as the key reason for holding the cash rate.
The Euro also advanced versus its major peers on Tuesday morning. The appreciation can be linked to data which showed German inflation held in lined with expectations. Although still a flat line figure, German Consumer Prices avoided falling into negative territory which could see the European Central Bank (ECB) hold off from expanding quantitative easing.
Although crude prices dropped over night, the huge advance in Chinese stocks has improved oil futures significantly. This weighed on demand for the Indian Rupee, which declined versus its major competitors.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3477.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate is currently trending in the region of 100.0000.
Yesterday…
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Edge Higher after Hawkish Fed Speeches
The Pound Sterling to Euro (GBP/EUR) exchange rate advanced by around 0.1% on Monday afternoon.
Despite a complete absence of British economic data, the asset advanced versus its major peers. The appreciation can be attributed to positive speeches from Federal Reserve officials improving bets regarding the timing of a Federal Reserve rate hike. Given that most economists agree that the Bank of England (BoE) is very likely to hold off increasing the benchmark interest rate ahead of the Federal Reserve, any positive regarding Fed rate hikes is supportive for the Pound.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3501.
Although the US Dollar is holding a competitively weak position, the shared currency softened versus its major peers. This is mainly the result of improved bets regarding a 2015 Fed rate hike. Additional losses can be attributed to speculation that the European Central Bank (ECB) will be forced to expand quantitative easing in hopes of stoking Euro-area price pressures. German inflation data, due for publication during Tuesday’s European session, will be extremely important for those trading with the common currency.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.3457 to 1.3519 during Monday’s European session.
Pound Sterling to Indian Rupee (GBP/INR) Conversion Rate Predicted to Strengthen on Rising Crude Prices
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate advanced by around 0.2% on Monday afternoon.
In addition to improved Federal Reserve rate hike bets, the Pound found support on Monday after the Shanghai Composite Index ended the Asian session 3.3% higher, reaching a fresh 7-week high amid speculation of intervention from Beijing. This is positive for Sterling because Chancellor George Osborne recently announced that he plans to merge the UK’s stock markers with China’s. This move is surrounded by uncertainty, however, given that the markets may resume depreciation once China’s government stops intervention.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate is currently trending in the region of 99.2560.
Indian economic data produced positive results on Monday but the Rupee softened versus many of its major peers. August’s Industrial Production and Manufacturing Production bettered estimates, and September’s Inflation Rate rose above estimates. However, oil prices gained after China’s stocks rose which caused dampened demand for the Indian asset.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate was trending within the range of 99.1380 to 99.6320.
British Pound Forecast to Hold Gains ahead of Consumer Price Index
Given that the Bank of England (BoE) Monetary Policy Committee (MPC) highlighted the absence of inflationary pressure as the primary obstacle preventing a benchmark rate increase, traders will be focussed on Tuesday’s British Consumer Price Index. Although forecast to stagnate, any move above 0.0% will confirm BoE Governor Mark Carney’s assertion that low inflation is transitory. This would cause the Pound to rally significantly. On the flip side of the coin, a drop into negative inflation would dampen demand for the Pound considerably.
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