A lack of UK news retrained Pound movement on Monday, but the Pound to Indian Rupee (GBP/INR) exchange rate was still trending 0.3% higher.
The USD/INR pairing was also in a stronger position having advanced by over 0.25%.
In an otherwise quiet trading session, the Rupee lost ground against several of its most traded currency counterparts as a result of speculation surrounding the amount of US Dollars purchased by companies with import payment demands.
In the view of currency trader Naveen Raghuvanshi; ‘Continuing Dollar demand from importers is reflecting on the Rupee. Equities are also not showing any signs of a major revival.’
The appeal of the Rupee was also shaken by an Indian report showing a steeper-than-forecast slowing in domestic wholesale price gains.
In June the Indian wholesale price index advanced by 5.43% year-on-year.
This was a four-month low, down from the annual reading of 6.01% recorded in May and less than the 5.8% increase predicted by economists.
The result makes it less likely that Raghuram Rajan, Governor of the Reserve Bank of India, will need to stick to a policy of higher interest rates.
However, the recent weather conditions could cause further inflationary pressures later down the line.
A severe lack of rain in some areas of India has led to crop failures and speculation that the price of certain goods could spike.
As asserted by an economist with Crisil Ltd; ‘The risk to inflation remains because of a poor monsoon. One data point in one month isn’t enough for the central bank to start cutting rates.’
India’s Consumer Price Index is scheduled for release at 5:30 GMT and it is expected that the measure will show a 7.7% increase in consumer prices.
A surprise result could trigger movement in both the Pound to Indian Rupee and US Dollar to Indian Rupee exchange rates.
The only other economic reports for India to be aware of this week include the nation’s Foreign Reserves Figures, Deposit Growth and Bank Loan Growth data.
Of course, movement in the GBP/INR exchange rate could also occur in response to the UK’s Consumer Price Index (out tomorrow) and influential employment figures (scheduled for publication on Wednesday).
Investors with an interest in the USD/INR pairing will be focusing on the US Advance Retail Sales figure for June. A month-on-month increase of 0.6% is expected, a surprising result could trigger US Dollar movement.
Indian Rupee (INR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,Indian Rupee,102.9000,
US Dollar,,Indian Rupee,60.1350,
Euro,,Indian Rupee,81.9330,
Australian Dollar,,Indian Rupee,56.5100,
New Zealand Dollar,,Indian Rupee,52.9750,
[/table]
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