The Pound Sterling to Indian Rupee (GBP/INR) exchange rate softened by -0.41% on Wednesday as the Indian currency recovered from the previous day’s data and the Bank of England (BoE) released a dovish inflation report.
Tuesday had been an interesting day for Rupee trading with the Indian Industrial Production, Manufacturing Production and Inflation Rate numbers published. High inflation has hindered the Indian economy for some time and April recorded a favourable decline from 5.25% to 4.87%. Many economists have suggested that the decline in inflation could see the Reserve Bank of India (RBI) cut rates in the near future. Industry expert Vikram Shawan commented: ‘The good thing is that the inflation expectations have come down. And that bodes very well as far as the RBI is concerned. There’s a very good possibility that we might see the CPI much below 6% or 5% in the coming few months and quarters.’
However, Indian Industrial and Manufacturing Production levels also recorded a drop on Tuesday, which failed to offer the Rupee exchange rate any support despite the decline in output also spurring June RBI rate cut hopes. Trader Ashish Vaidya suggested: ‘With inflation coming lower and IIP (industrial output) also a little low, chanced of a rate cut in June have increased.’
Thursday will be another exciting day for Indian data with the release of Wholesale Price Inflation (WPI), WPI Food, WPI Fuel and WPI Manufacturing ecostats all due for release. The Indian Rupee exchange rate could experience some fluctuations if the WPI Inflation number declines in line with forecasts, from 2.3% to 2.1%. Friday will close the week with the Indian Balance of Trade figure, which is also expected to have a high impact on the way the Rupee trades.
Meanwhile, the Pound offered the Rupee the opportunity to climb on Wednesday with the release of the Bank of England’s latest inflation report. The central bank cut its UK growth forecasts, allowing other major currencies the opportunity to gain against Sterling. The Pound Sterling to Indian Rupee (GBP/INR) exchange rate hit session lows of 99.9940 as the BoE predicted only 2.4% growth in 2015, down from the previous 2.9% forecast.
The Pound had enjoyed some buoyancy earlier in Wednesday’s European trading, climbing to highs of 100.8000 versus the Rupee, as UK labour market data impressed. The UK’s Unemployment Rate fell from 5.6% to 5.5% in March, while Average Weekly Earnings Excluding Bonuses managed to clamber above forecasts, rising from 1.9% to 2.2% in March.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate is currently trading at 100.0600. The Indian Rupee to Pound Sterling (INR/GBP) exchange rate is trending in the region of 0.0099.