Pound to Rupee Exchange Rate Today - GBP INR Climbs on Upbeat UK Statistics

September 17, 2014 - Written by Frank Davies

STORY LINK Pound to Rupee Exchange Rate Today - GBP INR Climbs on Upbeat UK Statistics

The British Pound to Rupee exchange rate (GBP/INR) continued the mid-week positive trend as currency investors reacted to the outcome of the latest Bank of England (BoE) Meeting Minutes, and upbeat UK domestic data.

The minutes have detailed the outcome of the latest Monetary Policy Committee (MPC) interest rate decision and revealed another split vote had taken place. Despite trading lower against Sterling, the Indian Rupee has gained against other majors this week (including the US Dollar) after it gained support from China’s expanding stimulus. A factor affecting both the Pound and the Rupee this week will be the Federal Open Market Committee (FOMC) meeting, which will see the Fed announce its latest decision on interest rates in the US.

Rupee Exchange Rate Gains with China’s Support

The Indian Rupee has been supported by China’s surprise announcement regarding the introduction of additional stimulus. The implementation of quantitative easing style measures has created positive sentiment amongst investors who believe that other Asian nations will begin to progress. Currency Analyst Anindya Banerjee commented: ‘The main drive of Asian currencies today is the report of stimulus injection by the central bank of China. At the same time, investors will be cautious ahead of the Federal Open Market Committee meeting.’

The People’s Bank of China is set to boost five of the economy’s largest banks in a surprising new move. The new measure is an attempt to manage variations in exchange rates and help large institutions meet the growing requests for finances. Expert in the field Tim Schroeders stated: ‘Authorities want to make sure they will achieve minimum, acceptable growth by providing more liquidity to banks, and I think the market will view that positively. Given the weak data, particularly over the weekend, some sort of stimulus measures were in the wind, but to see this occur overnight, I’d say it’s still a surprise to the market.’

Pound Exchange Rate Could Gain After Upbeat Data

Meanwhile, the Pound has enjoyed a positive day on Wednesday after a wealth of upbeat UK data swept the market. Furthermore, the most recent Bank of England Meeting Minutes have shown a split vote amongst Monetary Policy Committee (MPC) board members for the second consecutive month. August signalled the first divergence in opinion amongst policy members since 2011. The minutes stated: ‘Ian McCafferty and Martin Weale voted against the proposition, preferring to increase Bank Rate by 25 basis points.’

In addition, the UK’s better-than-forecast jobs data also saw the Pound climb against other majors. Perhaps most notably, the UK Unemployment Rate dropped lower than economists had forecast, falling from the previous 6.4% to 6.2% in the three months through July. Today’s figure is the lowest unemployment level for six years, a surprise after economists only expected a 0.1% drop.

Both currencies are likely to see fluctuations following the Federal Reserve’s interest rate decision later on Wednesday which will shake the market and consequently, the US Dollar. Moreover, Thursday will see Scottish citizens vote for or against independence from the UK, which may have a massive impact on Sterling either way. Economists have forecast the Pound could depreciate by 15% if Scotland leave or could climb by 5% if the ‘No’ vote prevails.

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