Pound to Rupee Exchange Rate (GBP/INR) Strengthens on Rate Cut forecasts

November 26, 2014 - Written by Toni Johnson

STORY LINK Pound to Rupee Exchange Rate (GBP/INR) Strengthens on Rate Cut forecasts

The British Pound Sterling (currency:GBP) advanced against the Indian Rupee (currency:INR) as demand for riskier emerging market assets weakened and on heightened end of month US Dollar demand from banks and oil companies.

The Indian Rupee had been trading higher against Sterling and other peers earlier in the week as custodian banks sold off US Dollars. Further, dollar sale by a large corporate firm and inflow of foreign funds in equities and debt markets acted as a positive factor.

Rupee Exchange Rate Today: INR Under Pressure

The Rupee was under pressure as Indian investors raised their bets that Finance Minister Arun Jaitley will persuade a more hawkish Reserve Bank to reduce interest rates as early as next week.

Finance ministry sources have told Reuters that Jaitley will urge Reserve Bank of India (RBI) Governor Raghuram Rajan to cut rates at the Dec. 2 policy review, fearing that economic growth may have slowed again by dropping to 5 percent in the three months to September.

The US Dollar to Indian Rupee exchange rate today is converting at 61.20500 USD/INR.

As the month ends, the Rupee went onto the retreat as it was weakened by the usual monthly bout of increased demand for US Dollars from oil importers and other companies. Demand is set to increase over the next few days as the US markets are set to close for the Thanksgiving Holiday period.

Also causing the currency to slip was increasing investor nerves ahead of next week’s Reserve Bank of India monetary policy review.

Demand for riskier emerging market assets remained under pressure as traders remained concerned over falling commodity prices and concerns that the global economy is experiencing a slowdown. Recent data out of China has disappointed and expectations are building in Europe that the European Central Bank is considering implementing a quantitative easing programme.

Pound Sterling to Rupee Exchange Rate Forecast

Further losses for the Indian Rupee are likely as the market awaits a wealth of market moving economic data releases out of the USA.

‘Rupee is expected to depreciate as US Dollar continues to trade strong and the month-end Dollar demand from oil importers may further hurt the currency,’ said Veracity economist Pramit Brahmbhatt.

The Pound found support despite the publication of mixed UK Gross Domestic Product (GDP) data. According to the London based Office for National Statistics (ONS), the UK economy expanded as forecast by 0.7% on a quarter on quarter basis and by 3% on an annual basis. The report showed that the nation’s economy remains unbalanced, as much of the growth was a result of consumer spending making its biggest increase in more than four years.

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TAGS: Currency Predictions Daily Currency Updates Indi Forecasts