British Pound to Rupee Exchange Rate (GBP/INR) Advances on India's Trade Deficit & Iraq

June 24, 2014 - Written by John Cameron

STORY LINK British Pound to Rupee Exchange Rate (GBP/INR) Advances on India's Trade Deficit & Iraq

Oil prices send the Pound to Rupee exchange rate (GBP/INR) rose to near term highs.

The Indian economy’s status as a large scale consumer of crude oil saw the local currency slump to within half a Rupee of its lowest level for some 3 ½ months yesterday.

The Pound to Rupee exchange rate topped out during early trading, touching 102.6200 GBP/INR shortly after midnight UK time.

The forward move in global oil prices on the day, which sent the price of a barrel of Brent Crude up to its highest level since the early part of Autumn 2013 at $115.71, raised the spectre of rapid price inflation in the nascent superpower.

The jump in crude prices, which was in turn driven by deterioration in events in Iraq, where the nation’s government is struggling, and apparently failing, to contain a Sunni-led surge, had the additional effect of heightening fears that India’s burgeoning trade deficit may now spiral out of control.

Iraq situation could send Pound Rupee advancing

The situation in the global oil market could prove to be a continuing headache for India’s new Prime Minister Narendra Modi.

Many political analysts are now forecasting the potential for an all-out civil war in Iraq which could send the Pound Rupee rate up towards September 2013’s brief spike to above the 106.0000 GBP/INR threshold.

Ankur Jhaveri, co head of currency at Edelweiss Financial Services certainly concurs, stating yesterday that, ‘the rupee is likely to be under pressure given that India is a net importer of oil.’

Elsewhere, currency investors remain sweet in the Pound Sterling, with positive bets on the UK tender’s future performance reaching their highest level for over six years yesterday.

Pound Rupee forecast - watch London later

The continued support for the Pound has been driven by the recent assertion from Bank of England Governor Mark Carney that Britain’s Base Rate could be on the march Northwards sooner than market participants are currently expecting.

Look for further positive comments from BoE Chief Carney when he speaks in London later this morning to propel the Pound euro exchange rate through its extant 20-month high of 1.2564 which it touched off last week.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Daily Currency Updates Euro Forecasts Euro Pound Forecasts Indian R Forecasts