Against all the odds, the Pound has risen dramatically against the Indian Rupee today, following a broad-based rally following a highly-anticipated speech from UK Prime Minister Theresa May.
The Indian Rupee has failed to gain a foothold against the extremely desirable Pound and has dipped following a rise in the cost of crude oil.
Last week’s Pound Rupee movement saw the Pound start at a rate of 82.87. After a week of wild fluctuations in the pairing, Sterling closed trading on Friday up at around 83.07.
Pound Sterling to Rupee Demand Soars after PM May Offers Brexit Clarity
The Pound’s advance against the Indian Rupee by around 2.5% today has come as a shock to investors and economists alike, who had suspected that getting the (relatively) unvarnished truth from Theresa May would cause the Pound to crash.
Instead, Sterling has jumped to the best rates seen since early January against the Rupee, following Theresa May’s eventual admission that the UK will be leaving the EU single market.
May seemingly negated any negative backlash from this announcement by stating that a variety of alternate trading agreements or customs unions could be sought after finally leaving the EU, but was frustratingly light on details when it came to the specifics of immigration into the country.
As a key issue in the EU Referendum campaign, attitudes to immigration have polarised the population after the vote, but while May hinted at a merit-based immigration control scheme, she also failed to commit and lay down any hard statements on the subject.
Indian Rupee Weakness Triggered by Rising Oil Costs, IMF Downgrade
Indian news has been much more low key than the UK’s, with the only data out recently showing rising inflation in December.
With a data-devoid week ahead until Friday, the Rupee sunk after the International Monetary Fund (IMF) downgraded its forecast for Indian growth from 7.6% to 6.6%.
GBP/INR Exchange Rate Forecast
For the rest of this week, Pound/Indian Rupee exchange rate movement may occur as a result of UK jobs data on Wednesday morning, as well as a speech from Bank of England (BoE) official David Rule on Thursday afternoon.
Closing what has been a dramatic week for the UK will be Friday’s retail sales figures, along with India’s bank loan growth figure for January.
In brief, UK claims are forecast to rise, unemployment is expected to remain at 4.8% and average earnings (including bonuses) are expected to tick up marginally.
Rule might comment on the possibility of an early interest rate hike, while retail sales are set to jump on the year and fall on the month in December.