With upbeat economic news in the US making it increasingly likely that the Federal Reserve will continue to taper stimulus as the new year gets underway, the Rupee is locked in bearish relationships with several of its main currency rivals.
The Indian asset extended declines against the US Dollar and Pound overnight as positive developments in the US and Britain highlighted India’s economic failings.
Although yesterday’s manufacturing PMI for India showed growth, the pace of expansion slowed from November’s 51.3 reading to 50.7, prompting this slightly pessimistic response from economist Leif Eskesen; ‘Manufacturing activity decelerated slightly in December as a slowdown in domestic order flows led to slower output growth. […] Today’s numbers show that growth remains moderate and struggles to take off due to lingering structural constraints. Even so, inflation pressures remain firm and are proving sticky. RBI may yet again have to flex its muscles and tighten monetary policy to bring down the elevated level of inflation.’
Meanwhile, other industry experts have expressed concerns that Indian growth has bottomed out and will remain sluggish in early 2014.
Conversely, the UK’s economic recovery appears to be going from strength to strength, with a strong housing market lending underlying support and unemployment falling more quickly than anyone had anticipated.
This morning the Pound extended gains against peers like the Rupee as UK house prices were shown to have surged by a seasonally adjusted 1.4 per cent in December, month-on-month.
Sterling received a further boost as UK construction PMI came in slightly above the 62.0 level forecast, indicating that the sector continued to enjoy a rapid rate of expansion in December.
The construction report detailed impressive rises in output in the three main areas of activity.
With Indian economic news thin on the ground next week GBP/INR news is most likely to be driven by UK data, including services PMI, trade balance, GDP and manufacturing/industrial production figures.
Current Rupee (INR) Exchange Rates:
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The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 102.6220 >
The Euro/Indian Rupee Exchange Rate is currently in the region of: 85.1023 <
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 62.3750 >
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 56.0664 >
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 51.6046 >
The Canadian Dollar/Indian Rupee Exchange Rate is currently in the region of: 58.7281 >
(Correct as of 10:05 GMT)
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