The Pound Sterling (GBP) to Indian Rupee (INR) exchange rate rallied to a one-week high on Thursday after a poll showed that support for the United Kingdom to stay together overtook that of the pro-Scottish independence campaign.
Support for the No to independence campaign received a boost after leading Scottish Banks and businesses said that they in the event of Scotland leaving the union they would move their operations into England, as a result the Pound halted the sharp declines it had experienced earlier in the week.
The poll, conducted by Survation on behalf of the Scottish based newspaper the Daily Record, showed 47% intend to vote ‘yes’ to independence while 53% plan to vote against. The figures exclude 10% of people who were undecided, however.
Sterling was also being supported by expectations that the UK’s economic recovery is continuing apace. Investors are widely forecasting that a report released on Friday will show that construction output increased for a second month in July. The nation’s recovery is continuing as recent data such as manufacturing and industrial production came in positively.
‘The recovery is going on regardless of Scotland and the markets will get over it. Sterling regained some strength on the latest poll as there may have been propel who sold on previous poll releases,’ said Neil Jones at the London based Mizhuo Bank Ltd.
Also offering support to the Pound were comments made by Bank of England Governor Mark Carney. Earlier in the week, he said that interest rates are likely to rise in the spring of 2015 as wage growth improves and the economic recovery continues.
“It is my judgment that, consistent with the guidance and our forecast, as the economy has continued to normalize, we have moved closer to the point at which Bank Rate will need to start to rise in order to achieve the inflation target,” Mr Carney said to lawmakers on Wednesday.
The Indian Rupee meanwhile was under pressure from risk aversion as US President Barrack Obama said that the US would escalate its military efforts against the Islamic State. Mr Obama added that the US would attack the terrorists wherever they may be found including Syria.
Falling commodity prices and concerns over the Chinese economy also dented sentiment towards the emerging market currency.
Pound Sterling to Indian Rupee exchange rate forecast
The Rupee is forecast to remain under pressure until Friday’s Consumer Inflation Report. India is also due to release its latest trade data some point this week.
Any news that suggests that the USA is getting closer to raising interest rates will also weigh upon the Indian currency.
Indian Rupee (INR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Indian Rupee,
,US Dollar,0.1641 ,
Indian Rupee,,British Pound,0.0101 ,
Indian Rupee,,Canadian Dollar,0.0180 ,
Pound Sterling,, Indian Rupee,99.0190 ,
Euro,, Indian Rupee,78.7560 ,
US Dollar,, Indian Rupee,60.9383 ,
[/table]
