With markets closed due to a national holiday, the Indian Rupee has experienced minimal volatility on Monday. The Pound has softened after fears that overvaluation has caused inflationary pressure which has stymied economic growth.
The Pound Sterling (GBP) to Indian Rupee (INR) exchange rate is currently trending in the region of 98.2990.
Sterling has depreciated against the majority of its most traded currency competitors on Monday after Business Secretary Vince Cable linked hampered domestic growth to the high value of Sterling.
‘Arguably, the Pound is overvalued by 10 to 15 percent on a trade-weighted basis,’ Cable told a side meeting yesterday at his Liberal Democrat party’s annual conference in Glasgow, Scotland. ‘This feeds back into monetary policy. It is a significant problem that we can’t directly address.’ These comments mirror those of Bank of England Deputy Governor Ben Broadbent who stated in July that; ‘It’s quite possible the Pound is 10 percent overvalued and its strength may have a long-lasting impact on inflation’.
Further losses have come courtesy of yearly New Car Registrations which declined from 9.4% to 5.6% in September.
With Indian markets shut down over a four day period due to Eid-ul-Azha; there has been little to influence Rupee movement. Any changes have been dictated by foreign currency movement.
The Pound Sterling to Indian Rupee exchange rate has hit a low today of 98.1390.
Forecast for the Pound Sterling to Indian Rupee Exchange Rate
On Tuesday there will be a few British economic data publications with the potential to initiate volatility. Industrial Production is forecast to increase from the previous figure of 1.7% to 2.6%. Manufacturing Production is also predicted to advance from 2.2% to 3.4%.
Perhaps the most significant data release will be the NIESR Gross Domestic Product Estimate. The meaning and consequences of the report are very close to those for official GDP numbers.
Tuesday will also see HSBC Indian Services PMI which is forecast to tick upwards from 50.6 to 50.89.
With an absence of Indian economic data on Wednesday and Thursday the GBP/INR exchange rate will largely be dictated by British domestic data. Thursday’s Bank of England Rate Decision is sure to ignite volatility although most agree it will be unlikely that the policymakers will alter the current record-low benchmark rate of 0.50%.
Friday’s British trade balance data will be of interest to those invested in Sterling.
Indian data on Friday is likely to be of interest for Rupee traders. Industrial Production is forecast to increase from 0.5% to 1.14%. Manufacturing Production is expected to contract from -1.0% to -2.58%.
The Pound Sterling to Indian Rupee exchange rate has reached a high today of 98.6350.
