The Pound Sterling to Indian Rupee (GBP/INR) exchange rate is trending within a narrow range on Monday afternoon.
This can be attributed to positive data out of India prompting a Rupee appreciation. A softer US Dollar has also supported the Indian Rupee uptrend.
The Pound Sterling, meanwhile, is trending lower versus the majority of its most traded currency competitors as traders speculate that the UK’s economic momentum is losing steam, as evidenced by slowing factory output.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate is currently trending in the region of 94.0380.
Pound Sterling (GBP) Exchange Rate Softens on Policy Divergence
As the Federal Reserve moves towards rate revisions, the UK’s slowing economic momentum has delayed bets as to the timing of a rate increase. The widening policy divergence between the major central banks is likely to cause volatility in the foreign exchange market.
‘The Pound is falling against the Dollar because of the divergence view on monetary policy between the Bank of England and the Fed,’ said Peter Rosenstreich, chief analyst at Swissquote Bank. ‘The economic momentum in the UK is not as strong as many believed.’
Compounding the Sterling declination is the Lloyds Employment Confidence data, which dropped from 1 to -2.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate dropped to a low today of 93.9030.
Indian Rupee (INR) Exchange Rate Gains on Fed Delay
After US labour market data printed disappointingly last week, traders delayed bets as to the timing of a Fed rate hike. This caused emerging market currencies, such as the Rupee, to advance. Additional gains can be attributed to speculation that inflation will support rate cuts.
‘Any bad US data reading has an impact on the market’s expectations of a Fed rate hike,’ said N.S. Venkatesh, head of treasury at IDBI Bank Ltd. ‘Indian assets are rallying also amid hopes of a reduction in domestic interest rates as inflation stays under control.’
Pound Sterling to Indian Rupee (GBP/INR) Exchange Rate Forecast to Trend Lower
Providing today’s Indian economic data meets with expectations; the Rupee is very likely to extend its advance against the Pound. In addition, the continued declination in the crude market is likely to support the Indian asset.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate advanced to a high today of 94.6850.
