The Pound Sterling to Indian Rupee (GBP/INR) exchange rate strengthened by around 0.34% on Wednesday morning.
After British economic data failed to impress, the Pound softened versus many of its major peers. A lack of investor confidence amid political uncertainties is also weighing on demand for the Pound as we draw nearer to the general election.
The Indian Rupee, meanwhile, slumped across the board after the Reserve Bank of India (RBI) surprised economists by cutting the lending rate earlier than expected. Domestic data had minimal impact under the weight of looser monetary policy.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate is currently trending in the region of 95.2370.
Pound Sterling (GBP) Exchange Rate Edges Lower on Disappointing Data
Wednesday’s British data printed disappointingly, causing the Pound to soften versus some of its most traded currency competitors. The British Retail Consortium’s (BRC) Shop Price Index was forecast to decline by -1.2% in February on the year, but the actual result saw shop prices drop by -1.7%.
Whilst the Composite PMI held at 56.7, the Services PMI softened from 57.2 to 56.7. Chris Williamson, Chief Economist at Markit, said; ‘Although the rate of expansion slowed in the vast services economy, growth has picked up in both manufacturing and construction. The three PMI surveys collectively indicated a slight acceleration in economic growth for a second successive month in February as a result, consistent with GDP growth picking up to 0.6% in the first quarter.’
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate dropped to a low today of 94.6830.
Indian Rupee (INR) Exchange Rate Dives on RBI
The RBI surprised economists on Wednesday morning by cutting the benchmark interest rate by 25 basis points. ‘Given low capacity utilisation and still-weak indicators of production and credit off-take, it is appropriate for the Reserve Bank to be pre-emptive in its policy action to utilise available space for monetary accommodation,’ RBI Governor Raghuram Rajan said in a statement.
‘The Reserve Bank of India is expressing its confidence on inflation outlook,’ said Radhika Rao, economist at DBS in Singapore. ‘This also means that despite a higher fiscal deficit, the quality of fiscal consolidation has satisfied central bank’s expectations.’
The Indian Services PMI eclipsed expectations and printed positively, but the data had minimal impact on the Rupee with the rate cut dominating focus.
Pound Sterling to Indian Rupee (GBP/INR) Exchange Rate Forecast to Hold Gains
Although the forthcoming general election and disappointing data is weighing on demand for the British asset, the Pound Sterling to Indian Rupee (GBP/INR) exchange rate is likely to hold gains for the remainder of Wednesday’s trade. Both the RBI rate cut and rising crude prices are likely to keep the Rupee trending lower. The RBI Current Account data, due for publication later on Wednesday, is unlikely to have much of an impact.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate climbed to a high of 95.3230 today.
