Tuesday’s British inflation data has printed particularly negatively causing Sterling to soften against the majority of its most traded currency competitors. Meanwhile, the Indian Rupee has steadily strengthened from huge cuts to global oil prices.
The Pound Sterling to Indian Rupee exchange rate is currently trending in the region of 97.8367.
In the past few days the Pound has depreciated against nearly all of its major peers after a dovish International Monetary Fund report turned the currency market on its head. The report suggested that global economic growth had cooled significantly and may never return to the high levels enjoyed prior to the financial crisis.
In the aftermath of the report a spate of cautious trading has driven the market. Significantly, in terms of Sterling detriment, the report also caused traders to pare bets on the timing of central bank rate increases.
On Monday the Indian Rupee gained momentum after the yearly inflation rate declined closer towards the 6% target. The Year-on-Year Inflation Rate was forecast to drop a little from 7.73% to 7.5%, but the actual result fell to 6.46%.
The Pound Sterling to Indian Rupee exchange rate has hit a low today of 97.7096.
On Tuesday the Pound depreciation has been accelerated by less-than-ideal inflation data. The Consumer Price Index declined beyond the median market forecast of a drop from 1.5% to 1.4%, with the actual result falling to 1.2%. Additionally the Core CPI cooled beyond the market consensus of a drop from 1.9% to 1.8%, with the actual result dipping to 1.5%.
The Bank of England has highlighted addressing inflationary issues as one of the prerequisites for monetary policy normalisation. Given that the CPI data indicates inflation to be moving away from the 2% target, it is unlikely that the BoE will be making a revision to their benchmark rate any time soon.
Tuesday’s Indian data has been slightly negative. The Wholesale Price Index was forecast to drop a little from 3.74% to 3.7%, but the actual result fell to 2.38%. Additionally Balance of Trade showed a declination beyond the median market forecast, dropping from $-10.84 billion to $-14.25 billion.
However, the slightly disappointing inflation and trade balance prints haven’t been enough to shake the Rupee off its high perch as it continues to make gains amid global oil price cuts. Mark Shenk, reporting for Bloomberg, wrote; ‘Brent crude fell to the lowest level in almost four years after the International Energy Agency said oil demand will expand this year at the slowest pace since 2009. West Texas Intermediate slipped for the fifth time in six days’.
Forecast for the Pound to Indian Rupee Exchange Rate
As oil cuts dominate the commodities market the Indian Rupee is likely to continue strengthening irrespective of economic data. An absence of Indian data on Wednesday will likely be beneficial for the Rupee.
With inflation concerns dominating analysts focus it is unlikely that Wednesday’s British data will transform Sterling’s fortunes. Those invested in the Pound will be interested to see how the average weekly earnings correlate with inflation.
The Pound Sterling to Indian Rupee exchange rate has advanced to a high today of 100.4809.
