The Pound to Indian Rupee (GBP INR) exchange rate has nosedived today following a report from Germany’s Deutsche Bank warning that Sterling is likely to peak in the near future.
Pound (GBP) Pressured by Predictions it Will Fall in Early 2017
In the report published by Deutsche Bank, strategist Oliver Harvey has said that he believes the Pound is currently overvalued following its recent rally and that investors should look to start shorting the struggling currency.
Harvey forecasts that the Pound is likely to fall early next year in advance of the formal ‘Brexit’ process, explaining;
‘The market has all but priced out the risk premium introduced after Theresa May’s conference speech in early October and mentions of Brexit on Bloomberg have dropped to their lowest levels since the referendum. But political risk looks set to rise into the New Year.’
He also indicates that potential political disruption in Europe next year could also weigh on the Pound as it hinders the chances of the UK government negotiating a favourable ‘Brexit’ deal;
‘Given the very messy European political calendar in H1, we are concerned that initial negotiations could be fractious.’
Indian Rupee (INR) Stable after Demonetisation
The Indian Rupee has begun to recover from the Indian governments shock decision to demonetise over 80% of the countries cash, as Prime Minister Narendra Modi attempts to target corruption in the emerging economy.
The Rupee has begun to rise the new notes begin to reach a high proportion of the population. However there are concerns that it could take until mid-July for the new denominations to be fully disbursed, something that it likely to drag on the mostly cash based economy.
GBP INR Exchange Rate Forecast: Pound May Rally on Public Spending Data
The GBP INR exchange rate may recover on Wednesday following the latest Public Sector Borrowing report, which is expected to show that the UK government’s borrowing dropped from £11.3bn to £4.3bn in November.
The Pound my rally further later in the week with the release of the Britain’s last GDP figures for 2016, which are predicted to show that the UK’s economy grew from 2.1% to 2.3% in the third quarter.
Current Interbank Exchange Rates
At the time of writing the GBP/INR exchange rate was trending around 84.32 and the INR/GBP exchange rate was trending around 0.01.
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