Earlier this week the Pound was supported by positive Bank of England meeting minutes, steady UK employment data and a forward thinking budget and the GBP to INR pairing was holding steady as a result.
However, as the end of the week approached the Rupee surged, recouping losses against several of its most traded rivals as investors bet that next month’s national elections will leave the country with a politically stable and economically minded coalition government.
Hopes that India’s recovering economy will attract inflows also aided the Rupee’s advance.
Last year the emerging-market currency plummeted as the US expressed its intention to trim the extensive level of bond buying responsible for shoring up India’s economy during the global financial crisis.
However, while the currency shed 0.6 per cent against the US Dollar yesterday, it was the Rupee’s most significant drop since January and the Rupee is generally stronger.
According to Bloomberg News, strategist Jonathan Cavenagh said this of the Rupee’s performance; ‘India is seeing inflows as inflation goes down and boosts real yields. There is also strong optimism before the elections and all of that provides a good flow backdrop.’
Meanwhile, another industry expert stated; ‘Foreign investors bought Indian shares worth 117.87 million Dollars on Thursday when the benchmark BSE Sensex fell 0.4 per cent, highlighting the strong overseas interest for Indian equities’.
The Rupee may experience additional movement later today following the release of India’s foreign reserves, bank loan growth and deposit growth figures.
Next week the only Indian data to look out for is the nation’s weekly foreign reserves report.
Meanwhile, the Pound began local trading on Friday in a weaker position against the majority of its currency counterparts.
The British currency continued trading lower against the Rupee following the release of UK public sector net borrowing data.
The report showed that public sector net borrowing came in at 7.5 billion pounds in February, less than the 7.9 billion forecast but up from a negatively revised -6.8 billion Pounds in January.
Next week global developments and UK news are likely to be the main causes of Pound to Rupee movement.
UK reports to be particularly aware of include inflation figures, retail sales data and GDP.
Indian Rupee (INR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,Indian Rupee,100.6040,
US Dollar,,Indian Rupee,61.0800,
Euro,,Indian Rupee,84.2158 ,
Australian Dollar,,Indian Rupee,55.4440,
New Zealand Dollar,,Indian Rupee,52.2863,
[/table]
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