US Dollar to Indian Rupee (USD/INR) Fluctuates on Oil Prices, GBP to INR Drops after BoE Comments

On Tuesday the US Dollar to Indian Rupee exchange rate was trading in the region of 60.1050, close to the day’s high of 60.1650.

The Pound to Indian Rupee exchange rate, meanwhile, was enjoying a stronger position and pushed to 102.3550.

The Rupee began the week struggling against its currency counterparts as the situation in Iraq pressured commodity-driven and emerging market currencies. However, after softening for two days the Indian asset was finally able to recoup losses during the local session on Tuesday.

As some industry experts bet that the world’s oil supply won’t be considerably disrupted by the ongoing conflict in Iraq the price of oil dropped.

Crude oil prices eased even as reports emerge of Iraqi insurgents gaining even more territory and approaching the boarder with Jordan.

In the opinion of Anindya Banerjee; ‘Crude oil prices have come down and that is supporting the Rupee. The Rupee in the short term will be guided completely by oil.’

Although economic data for both India and the UK is lacking this week, there are several important reports coming out of the US which could have an impact on the currency markets.

Yesterday the US Manufacturing PMI data showed the most impressive improvement in business conditions for four years, with the index jumping from 56.4 in May to 57.5 in June.

The report saw Markit economist Chris Williamson note; ‘The survey data suggest that GDP should be set to rise by at least 3.0% after the 1.0% decline in the first quarter.’

Separate figures showed that existing home sales in the US increased by considerably more than anticipated.

However, gains in the USD to INR exchange rate were limited as investors fixated on the fact that the US Federal Open Market Committee is unlikely to bring in an interest rate increase any time soon.

Volatility in the ‘Greenback’ is low, and as currency strategist Emma Lawson notes, ‘We don’t expect the Dollar to deteriorate, but equally, it’s not expected to really take off until we get some indication of a change’.

Movement in the GBP to INR exchange rate was restrained by an absence of pertinent economic news for the UK. While today’s BBA Loans for House Purchase report showed that more loans had been issued in May then economists had forecast, the data had little impact on the Pound.

Later today some modest market volatility could be occasioned by the UK’s Consumer Confidence index and New Home Sales figures.

Updated 13:15 GMT 24 June 2014

The Pound to Indian Rupee lost all its earlier strength as the European session continued and the GBP/INR pairing dropped 0.32% in response to some surprisingly dovish commentary from the Bank of England. After the central bank’s Governor Mark Carney tempered rate hike expectations the Pound broadly softened.

The surprising remarks regarding the level of slack in the UK economy come just weeks after the BoE chief intimated that interest rates could be increased sooner than markets expect.

If this week’s UK reports (including Friday’s first quarter growth figures) don’t meet or exceed expectations, the Pound to Indian Rupee exchange rate (GBP/INR) may remain trading in a weaker position over the next few days.

Updated: 09:10 GMT 25 June 2014

USD/INR UP 19 Paise in Early Morning Trading

The US Dollar to Indian Rupee (USD/INR) exchange rate began trading in a stronger position on Wednesday, having climbed by 19 Paise to achieve a high of 60.32.

The weakness in the Rupee was largely due to increased demand for the ‘Greenback’ among importers. The Rupee had previously advanced as a result of falling crude oil prices.

As the European session opened the Pound to Indian Rupee (GBP/INR) exchange rate was slightly softer as yesterday’s commentary from Bank of England officials continued to weigh on Sterling.

With Indian data notably lacking today, Rupee movement will be the result of global economic developments.

The Confederation of British Industry’s Reported Sales data could have an impact on the Pound to Rupee (GBP/INR) exchange rate.

Volatility in the US Dollar to Indian Rupee (USD/INR) exchange rate could be occasioned by today’s US 1Q GDP report and US Personal Consumption, Services and Durable Goods Orders figures.