Pound Sterling exchange rates may have been on a steady downtrend last week, but the current week has seen a significant improvement in GBP/INR, with the pairing rising from an initial low of 86.0571 to a high of 87.3690.
The Indian Rupee has been having a tougher time against its peers, with the rising cost of crude oil and high inflation thwarting any chance of a Rupee rally.
Pound Recovers Recent Losses on Employment Figures
The Pound gained across the board on Wednesday, posting modest gains against the Indian Rupee and other peers. Last week’s Pound performance was exceptionally poor by comparison, with high economic pressures and ever-present negativity holding Sterling back.
The source of this latest uptrend in Pound movement has been UK jobs data, consisting of July’s claimant count change and June’s unemployment rate and average earnings, with and without bonuses.
Expectations had been pessimistic, with an expected rise in claimants to 5.5k coming alongside an expected drop in average earnings including bonuses.
Happily for Sterling investors, however, this negativity failed to materialise, with claimants actually dropping by -8.6k, and earnings rising slightly in both fields. The unemployment rate result met with forecasts, remaining at 4.9%.
Indian Rupee Softened as Rajan’s Successor is Poised to be Announced
The Rupee has been devalued against the Pound this week, with clear uncertainty among investors stemming from a trio of factors.
The first has been the price of crude oil, which has been rising steadily from under $46 per barrel to close to $47 during the week; this has weakened the national economy slightly, as it has impaired the import of this vital commodity.
The second bit of damage has been done by Tuesday’s WPI July inflation rate stats, which have shown a highly concerning rise in base inflation from 1.62% to 3.55% and a food inflation increase from 8.18% to 11.82%.
Finally, the news that a successor to Reserve Bank of India (RBI) Governor Raghuram Rajan is to be appointed has put economists on edge, mainly because of the huge void that his legacy leaves behind. In addition to predicting the late 2000’s financial crash, Rajan is also credited with being an extremely steady hand over India’s economy, particularly in the area of inflation.
GBP/INR Exchange Rate Forecast
For the rest of this week and the week to come, Pound Sterling/Indian Rupee exchange rate movement may occur as a result of Thursday’s UK retail sales results for July, as well as Friday’s public sector net borrowing result; from India, Friday will being deposit growth and bank loan growth figures.
Next week, CBI data is due on Tuesday while Friday’s GDP growth rate second estimate could cause major closing movement for the Pound.
For this week’s remaining UK results, retail sales have been forecast to rise on the month but fall on the year, while a smaller amount is expected to be have been borrowed in Friday’s data (3.3bn, down from 7.31bn.
For the coming Tuesday’s Confederation of British Industry (CBI) industrial trends orders result, a worsening from -4 to -6 has been expected.
Closing off next week for the UK will be Friday’s GDP growth rate second estimates for Q2, which are expected to rise on both the quarter and the year.