Pound Sterling to Indian Rupee (GBP/INR) Exchange Rate Drops as INR Benefits from Falling Oil Prices

Indian Rupee to Pound (INR/GBP) Exchange Rate Rises on Falling Oil Prices

The Indian Rupee (INR) has benefitted from a drop-off in crude oil prices today, which has led to an advance against the weaker Pound (GBP).

A decline in crude oil costs is beneficial to India as a whole, given the nation’s high import bill.

The Rupee has received additional support from a devaluation of the US Dollar, which has increased risk sentiment to the benefit of the Rupee.

Despite the Indian Rupee strength today, a storm is brewing in the background between the Reserve Bank of India (RBI) and the Indian government.

There are reports that the government could be seeking to assert control over the RBI, which would remove its provisional independence and might spark a sharp drop in the Rupee’s value.

This comes in the context of US President Donald Trump’s similarly controversial antagonism towards the US central bank, the Federal Reserve.

Forecast-Beating PMI Data Fails to Support GBP/INR Exchange Rate

The Pound (GBP) has fallen by -0.8% against the Indian Rupee (INR) today, following analysis of the morning’s construction PMI data.

The PMI reading for October rose instead of falling as forecast, but the general attitude was that construction faces severe headwinds.

Summing up the figures, Chartered Institute of Procurement and Supply (CIPS) Group Director Duncan Brock said:

‘On the surface, the construction sector showed growth but there was plenty for businesses to be concerned about underneath.

‘Optimism was at its lowest level for six years … however, job creation bucked this downward trend with one of the highest levels of hiring in the last three years and civil engineering experienced a slight reprieve after a few disappointing months.

‘These results point to the sector getting stuck in the mud as we approach March 2019, and with ongoing supplier delays and stock shortages, the sector may not be able to respond quickly enough anyway should there by a sudden upturn in fortunes.’

GBP/INR Exchange Rate Outlook: Is Pound Sterling Volatility ahead on Services Data?

PMI data will remain in the spotlight on Monday, with both UK and Indian services data due out.

Current estimates are for a faster pace of Indian services activity, although the jury is out on whether the UK variant will rise or fall.

Service sector activity represents a significant contribution to UK economic growth, so a sharp rise could be enough to boost the GBP/INR exchange rate.

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Adam Solomon

Adam joined the team at TorFX soon after graduating from University in 2005 with a degree in Journalism. Since then Adam has advanced to become both Head of Trading and Head of Treasury. His keen interest in the currency market and knowledge of what drives exchange rates makes him perfectly positioned to produce regular market updates focused on the movements of the major currencies.

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