Pound Indian Rupee (GBP/INR) Exchange Rate Rangebound after UK Retail Sales Beat Forecasts

Pound Indian Rupee (GBP/INR) Exchange Rate Trends Sideways as UK Energy Bills Set to Soar

(Updated 16:41 09/08/22)

The Pound Indian Rupee (GBP/INR) exchange rate ended the day trading within a narrow range. The currency pair shed its gains after optimism surrounding an uptick to UK retail sales proved short-lived. Reports released today that UK energy costs may surpass £4200 in January may have also pulled GBP/INR lower amid a lack of concrete response from the UK government.

At time of writing the GBP/INR exchange rate is at around ₹96.1940, virtually unchanged from this morning’s opening figures.

Original article continues below:

Pound Indian Rupee (GBP/INR) Exchange Rate Edges Higher amid Hawkish BoE Rhetoric

The Pound Indian Rupee (GBP/INR) exchange rate is ticking higher today. The currency pair could be seeing support from higher than forecast retail sales for the UK. Additionally, hawkish comments from Bank of England (BoE) officials could be helping to boost GBP/INR.

At time of writing the GBP/INR exchange rate is at around ₹96.3455, which is up around 0.2% from this morning’s opening figures.

Pound (GBP) Firms as Heatwave Boosts Retail Sales

The Pound (GBP) is edging higher against many of its rivals today despite a retreat in risk appetite. Sterling could be seeing gains in the short-term after retail sales figures surprised to the upside.

Retail sales figures compiled by the British Retail Consortium (BRC) rose by 1.6% versus a forecast fall of -1.1%.

Economists such as Paul Martin of KPMH fear the figures may represent ‘the lull before the storm’, however. The BRC’s figures are not adjusted for inflation which is currently at a 40-year high of 9.4%. Factoring this in, the figures represent a drop in the volume of sales. These forecasts will do little to dispel the Bank of England’s gloomy predictions for the UK economy.

Signals that UK energy bills may climb even higher this year may be capping gains for the Pound, however. Reports on Monday indicated that Norway, an exporter of energy supplies to the UK, may focus on domestic supplies this winter.

Sterling could see additional support from BoE rate hike bets, however. Speaking on Tuesday, BoE Deputy Governor Dave Ramsden signaled that the central bank would likely need to raise interest rates again in the coming months.

Indian Rupee (INR) Trends Lower amid Oil Price Slip

The Indian Rupee (INR) is ticking lower against its peers today. A risk-off market mood may be limiting bets on the Rupee today.

A slip to crude oil prices may provide support to the currency. The possibility of a fresh supply injection from Iran has likely pushed the price per barrel lower today.

The currency could also be underpinned by bets on further interest rate hikes from the Reserve Bank of India (RBI), however. The central bank rose interest rates by another 0.5% last week, and economist are predicting further rate hikes before the end of the year.

GBP/INR Exchange Rate Forecast: Will UK GDP Slump Fuel Recession Fears?

Looking to the week ahead for the Pound (GBP), GDP figures on Friday are likely to be significant for the currency. Data releases are forecast to indicate that the UK’s economy contracted in June, with GDP growth slumping in the year’s second quarter. If the figures print as forecast, then the currency may fall amid fears of a recession for the UK later this year.

Additionally, political uncertainty in the UK could continue to keep pressure on the Pound throughout the week. Investors will be looking to the country’s government for a plan to deal with the cost-of-living crisis.

For the Indian Rupee, Friday’s inflation figures could help to push the Rupee higher off the back of interest rate hike bets. Whilst July’s rate is forecast to dip to 6.9%, the figure would still sit well above the RBI’s target range of 2%-6%.

On the other hand, Friday’s predicted downturn to industrial and manufacturing production could cap gains for INR.

Gareth Monk

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