The Pound Sterling to Indian Rupee (GBP/INR) exchange rate softened by around -1.05% on Friday afternoon.
Although the Indian Rupee surged against most of its major peers on Thursday after a surprise move by the Reserve Bank of India (RBI) to ease monetary policy, the shock decision by the Swiss National Bank (SNB) to remove its 1.20 Euro cap has roiled the currency market.
With demand for safe-haven assets increasing exponentially, emerging market currencies softened against many of their competitors. However, continued declination in global oil prices allowed the Indian asset to advance against many of its most traded rivals.
The fallout from the SNB decision has also stretched to the Pound. However, unlike its commonwealth comrade, the contagion has been positive for Sterling. With investors seeking new currencies to invest in after the Swiss Franc lost its safe-haven status, the comparatively high British interest rate makes the Pound an attractive investment.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate is currently trending in the region of 93.1570.
Pound Sterling (GBP) Exchange Rate Strengthens on Franc Fallout
As explained above, the SNB’s Euro cap removal had a widespread effect on the currency market. With investors seeking new places to park their cash, the stronger British interest rate (when compared to other major central banks) is an attractive investment for higher-yielding potential.
However, uncertainties regarding the UK’s future place in Europe may come in to play once the dust settles from the SNB decision. With the general election fast-approaching, the possibility that the UK could leave the European Union is likely to spook traders, especially given the unknowns regarding the ramifications of a ‘Brexit’.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate has fallen to a low today of 93.6450.
Indian Rupee (INR) Exchange Rate Gains on Oil
Thursday’s decision by the Reserve Bank of India (RBI) to ease monetary policy allowed the Rupee to advance across the board. However, increased demand for safe-haven assets caused a Rupee decline on Thursday. The safe-haven qualities of gold saw the precious metal prices rise, and the Rupee softened as India is one of the foremost gold importers.
After advancing to a 4-month high, gold prices are beginning to fall again after the appreciation was seen as too fast. This has supported a Rupee surge thanks to cheaper imports. ‘I think the reaction to the SNB was probably overdone, and a bit of a knee-jerk, so gold probably does need to now consolidate,’ Analyst Robin Bhar stated. ‘It’s been hitting up against the top end of its trading range where there is resistance. I think there’ll be quite a few sellers into any further strength.’
Aiding the Rupee uptrend is the crude market, which showed oil prices heading for the largest weekly declination since 1986.
Pound Sterling to Indian Rupee (GBP/INR) Exchange Rate Forecast to Fluctuate
With gold prices changing, and with uncertainties regarding the UK’s position in Europe, the Pound Sterling to Indian Rupee (GBP/INR) exchange rate is likely to fluctuate on Friday.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate climbed to a high today of 94.4710.
