Over the past week, the Pound Sterling to Indian Rupee (GBP/INR) exchange rate was trending within the range of 97.5924 – 99.8641.
Towards the tail-end of last week, the Pound strengthened versus many of its currency rivals after the Office for National Statistics (ONS) introduced a new way of calculating Construction Output. This new method was used to calculate the most recent readings, and output in the sector bettered estimates considerably. As a result of the more accurate data, the ONS stated that construction had been upwardly revised throughout 2014 and in the first-quarter of 2015. The knock-on effect from improved construction numbers was an upward revision to British Gross Domestic Product (GDP) during the same period.
The Rupee, meanwhile, softened versus many of its currency rivals over the past week with the US Dollar holding a position of strength. Increased demand for the safe-haven US Dollar saw emerging-market currencies dip. In addition, geopolitical tensions in Europe are weighing heavily on trader risk-appetite. The Rupee did manage to gain towards the end of last week, however, thanks to falling crude oil prices. Saudi Arabia announced its intention to increase oil output in the hope of flooding the market and pricing out competition. The result saw crude prices tank, adding to the declination initiated by the OPEC after they stated that they would maintain current output levels.
Monday has seen the Pound Sterling to Indian Rupee (GBP/INR) exchange rate soften by around -0.33%. This is due, once again, to falling crude oil prices supporting cheaper Indian imports. British data printed positively, but the data was not particularly impactful. This could be the result of traders digesting Standard and Poor’s decision to hold the UK’s AAA plus rating but turn the nation’s outlook negative. The reasoning behind the downgrade is the potential fallout from a referendum on Britain’s place in the EU. India’s economic data, meanwhile, produced a mixed-bag of results. The Wholesale Price Index bettered estimates on the year, but May’s result of -2.36% is still a long way off the central bank’s target. WPI Manufacturing declined in May, however, with an annual drop of -0.64%.
Looking ahead, there will be several influential domestic data publications with the potential to provoke volatility for the Pound to Indian Rupee (GBP/INR) exchange rate. Perhaps most significant will be Tuesday’s UK Consumer Price Index. This is significant not only for its economic weighting, but because inflation dropped into negative territory in April. Bank of England (BoE) officials stated that the dip into deflation was only temporary and will not be of concern. Should inflation remain in negative territory, however, the Pound is likely to soften considerably. The Indian economic calendar is somewhat sparse over the coming week, so fuel prices and market sentiment will most likely dominate Rupee trade. However, Friday’s Indian Foreign Reserves data may impact upon movement.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate was trending in the region of 99.2540 during Monday’s European session.