The Pound Sterling weakened against the Indian Rupee on Monday following the release of poor UK retail sales growth data and as Indian President Pranab Mukherjee said that India has emerged as the world’s fastest growing large economy.
The GBP/INR exchange rate slumped to a session low of 95.41 after falling by more than 0.20%.
Praising the measures made by the Indian government, President Mukherjee said that the Indian economy grew at a pace of 7.4% over the course of 2014-15 and said that efforts were under way to ensure a better future for all Indians. His comments buoyed sentiment towards the Rupee and increased optimism that India could receive an upgrade of its current BBB- credit rating.
‘A promising future awaits us. Because of government’s sustained efforts and series of policy initiatives, our economy is again on the high growth trajectory. Our GDP is growing at 7.4%, which makes India the fastest growing large economy in the world,’ President Mukherjee said in an address.
The comments came as Standard & Poor’s said that India must boost growth, cut its fiscal deficit and follow through with reforms to the financial sector in order for an upgrade of its credit rating will be justified.
The Pound Sterling weakened against the supported Rupee as data released by the Confederation of British Industry (CBI) showed that British retail sales growth almost skidded to a halt in February as many stores reported a sharp drop in sales.
The CBI retail sales balance tumbled from a reading of +39 to +1, a figure that was well below economist expectations for a reading of +34. Monday’s number was also the lowest reading seen since November 2013.
As the week progresses traders of the Indian Rupee will likely adjust their positions ahead of the announcement of a number of government budgets and the release of an annual economic survey on Friday.
Traders of the Rupee will also need to keep an eye on Tuesday’s speech by Federal Reserve Chair Janet Yellen. Any hints that US policy makers are growing hesitant about raising interest rates this year and we can expect the Rupee to advance against the ‘Greenback’.
The main event for the Pound this week will be Thursday’s second estimate for fourth quarter GDP. The Pound will likely give up ground if the second revision comes in below the initial estimate made earlier in the month.