GBP/INR Conversion Rate Predicted to Tick Lower after UK Construction Output Contracted
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate softened by around -0.6% on Friday afternoon.
After the Bank of England (BoE) opted to hold the cash rate at the record-low 0.5%, the Pound softened versus its major peers. Although this was expected, the accompanying minutes were dovish enough to suggest a long-term delay to a benchmark interest rate increase. Policymakers highlighted the complete absence of inflationary pressure as the primary obstacle for raising rates. With commodity prices continuing to hold comparatively weak positions, price pressures don’t look to be making a sudden comeback.
Friday’s domestic data printed poorly, compounding the Sterling declination. Both the annual and the monthly readings for August’s seasonally adjusted Construction Output contracted unexpectedly. In addition, Trade Balance data showed that the deficit failed to narrow as much as forecast, although it is fair to say that the previous figures were negatively revised. However, trade balance continues to show a large deficit partly as a lack of demand from Europe.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate is currently trending in the region of 99.1360.
INR/GBP Exchange Rate Forecast to Edge Higher after Dovish Federal Reserve
After minutes from the most recent Federal Open Market Committee (FOMC) interest rate decision showed that policymakers were reluctant to hike the cash rate in the face of a global economic slowdown, the Indian Rupee advanced versus its major peers. An environment in which the US holds loose policy for as long as possible is positive for emerging market assets like the Indian Rupee. Stability in Asian stock markets is also supporting demand for the Indian asset, in addition to rising gold prices.
However, Rupee gains have been somewhat sluggish as oil prices advance. One of the side effects of rising stocks in the Shanghai Composite Index is speculation regarding heightened demand for crude from the world’s second-largest economy. In addition, falling output from the US has provoked an oil price recovery. Much later during the North American session the Bajer Hughes US Rig Count data will be published. This is likely to have a string impact on oil prices which will, in turn, have a string impact on Rupee volatility.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate has fallen to a low of 99.1360 during Friday’s European session.
Pound Sterling to Indian Rupee (GBP/INR) Exchange Rate Forecast to Hold Losses ahead of US Data
Given that India’s Foreign Reserves data is unlikely to be hugely impactful, and with an absence of further British economic data to provoke changes, the Pound Sterling to Indian Rupee (GBP/INR) exchange rate is likely to hold losses. US data may be impactful as a rising Dollar would cause the emerging-market rupee to cool but as the data due isn’t hugely influential the GBP/INR exchange rate is still likely to hold a weak position for the remainder of Friday’s European session.
Next week, Tuesday’s British inflation data will be hugely significant given that the BoE is looking to bring inflation closer to the 2% target before raising the benchmark interest rate. Although there will be several Indian economic data publications, the Rupee will most likely see volatility in response to US Dollar movement and oil prices over the coming week.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate advanced to a high of 99.7590 during Friday’s European session.
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