Indian Rupee to US Dollar (INR/USD) Exchange Rate Dives on US Jobs Data
With India’s Industrial/Manufacturing Production and Inflation Rate reports due for publication in the hours ahead, the Indian Rupee to US Dollar (INR/USD) exchange rate was able to strengthen modestly.
According to some industry experts, the Reserve Bank of India (RBI) is likely to ensure that the Rupee continues trending in the region of 58- 62 US Dollars.
Bank of America Merrill Lynch recently stated; ‘Our call that the RBI will hold the Rupee at 58-62 US Dollars has held so far, although the stronger US Dollar may force a temporary breach. RBI would ideally want to hold Governor Raghuram Rajan’s preferred 60-62 US Dollar zone. At the same time, it will not spend too much of precious foreign exchange at a time the Rupee has outperformed most BRIC/TIM currencies.’
India’s ecostats are due for publication at 12:00 pm GMT and are likely to provoke both Rupee to US Dollar and Rupee to Pound exchange rate movement.
The USD/INR exchange rate hit a low of 61.4575
Following the publication of India’s economic reports, the Rupee eased lower against the US Dollar but continued to trend in a stronger position against the Pound.
The data showed a far-stronger than anticipated easing in consumer price inflation. CPI fell to 5.52% in October on the year from 6.46 in September. Industrial production, meanwhile, advanced by 2.5% – beating expectations of a 0.7% increase.
Manufacturing Production also advanced by 2.5% on the year in September.
Analyst Suvodeep Rakshit said of the result; ‘For the very near term the softer trajectory will continue, possibly pushing down towards 5% so the rate-cut clamour would be much stronger. You can argue both ways in terms of whether you can ease rates but at least until the February policy I don’t see a rate cut coming.’
UPDATE
The Indian Rupee to US Dollar exchange rate is currently trending in the region of 0.0162.
On Thursday, the Indian Rupee has advanced against the US Dollar as a result of disappointing US data. US Continuing Claims showed an unwanted advance from 2,356,000 to 2,392,000 despite the median market forecast of a drop to 2,349,000. In addition, Initial Jobless Claims increased beyond the market consensus of a rise from 278,000 to 280,000, with the actual data reaching 290,000.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Trends at 3-Week Low
Yesterday’s better-than-forecast UK Like-for-Like Sales data may have given the Pound Sterling to Euro (GBP/EUR) exchange rate a modest boost on Tuesday, but the Pound was trending in a narrow range against its most-traded peers ahead of the publication of the UK’s wage data and Bank of England (BoE) inflation report.
Pound declines could occur if average earnings continue to trend well below the rate of inflation or if the BoE cuts its growth/inflation forecasts for the UK in light of the recent run of disappointing UK data.
In the opinion of currency strategist Lee Hardman; ‘While we are expecting a more dovish Inflation Report, the market has already adjusted and is not expecting the first rate increase until the second half of next year. That may help dampen a negative impact on the Pound. Any downward revisions in growth forecast won’t change the market view that the UK economy is still growing at a solid pace this year.’
If the UK’s employment data shows that the level of joblessness fell to a fresh six-year low, the Pound could receive some support.
The GBP/EUR exchange rate is trending in the region of 1.2763
The Pound went on to experience a very mixed morning of trading.
Sterling initially advanced on the majority of its currency counterparts (pushing above 1.28 against the Euro) after UK average earnings were shown to have increased by more-than-anticipated in the three months through September.
However, a dovish quarterly inflation report from the Bank of England (BoE) later caused widespread Pound losses. The GBP/EUR dropped by 0.2% while the GBP/USD exchange rate shed 0.3%.
UPDATE
On Thursday the Pound Sterling to Euro exchange rate fell to a fresh three-week low. Demand for the British currency was seriously undermined by the UK’s quarterly inflation report earlier in the week and a soft house-price print did nothing to derail the downtrend.
Even if the UK’s Construction Output report impresses, the GBP/EUR exchange rate is likely to head into the weekend trending in a softer position.
Euro to Pound Sterling (EUR/GBP) Exchange Rate Volatility Expected with GDP Data Due
After trading fairly statically on Tuesday, the Euro to Pound Sterling (EUR/GBP) exchange rate edged lower on Wednesday following the release of Germany’s Wholesale Price Index.
Fears that the Eurozone’s largest economy is on the verge of recession have weighed heavily on the Euro in recent months, and any disappointing stats from Germany only add to these concerns.
The nation’s Wholesale Price Index advanced by 0.1% on the month in September but followed this up with a -0.6% decline in October.
The Euro was also trading in a softer position against the US Dollar (EUR/USD)
Today’s Eurozone Industrial Production report could help the Euro recover ground if it shows the 0.7% month-on-month increase anticipated.
As the European session progressed the Euro consolidated and extended declines against the majority of its currency counterparts.
Industrial production in the 18-nation currency bloc was shown to have risen by 0.6% on the month in October, disappointing expectations and increasing concerns about the stagnant level of growth in the Eurozone.
The Euro to Pound Sterling (EUR/USD) exchange rate was trending in the region of 0.7834
On Thursday the Euro to Pound Sterling (EUR/GBP) exchange rate advanced by over 0.2% as demand for the Pound remained weak following Wednesday’s BoE Inflation forecast.
The Pound’s appeal was further undermined by a disappointing UK RICS House Price Balance gauge.
Meanwhile, the Euro was supported as final Germany’s Consumer Price Index for October was un-revised at 0.8% on the year.
The publication of the European Central Bank’s monthly report could cause additional Euro to Pound Sterling (EUR/GBP) today.
UPDATE
On Friday the day’s big data release is the Eurozone’s third quarter GDP figure.
Although German and French GDP surprised to the upside, Euro gains were limited ahead of the release of the Eurozone figure. Better-than-expected expansion could give the Euro a boost.
However, a figure of 0.1% or lower would seriously undermine demand for the common currency.
