Pound to Indian Rupee exchange rate Stronger - GBP/INR Outlook Today

December 3, 2014 - Written by Admin

STORY LINK Pound to Indian Rupee exchange rate Stronger - GBP/INR Outlook Today

The Pound strengthened against the Indian Rupee as the UK currency received support from the release of data which showed that the nation’s dominant services sector expanded more than forecast in November and received support from an improved UK economic forecast by Chancellor George Osborne.

According to research group Markit, its purchasing managers index for the UK service sector showed that the nations service industry expanded to a reading of 58.6 in November, up from October’s figure of 56.2, a figure which was a 17-month low. Economists had been forecasting for a figure of 56.5.

‘The UK service sector purchasing managers’ index offers more encouragement on fourth quarter GDP growth. The headline index has risen to 58.6 from 56.2 and with the manufacturing index also having risen on Monday, (while the construction index fell yesterday) it leaves the composite PMI at 57.6 versus 55.8 previously – the consensus forecast was for a reading of 56.2. The survey compiler suggests that these figures are roughly consistent with GDP growth of 0.6% quarter on quarter. We are more optimistic in terms of fourth quarter GDP, pencilling 0.8% quarter of quarter, based on a strengthening household sector and a rebound in investment,’ said ING Bank analyst James Knightly.

The Pound also advanced after Chancellor George Osborne said in his autumn statement that the UK growth forecast for this year was revised up to 3%. Growth in the UK next year is forecast higher - at 2.4%. Figures published by the Office for Budget Responsibility (OBR) then 2.2% in 2016, 2.4% the year after, then 2.3% in 2018 and 2019.

Against the Euro, the Pound advanced to its highest level in three weeks as data out of the Eurozone disappointed the markets yet again. The currency blocs top two economies, Germany and France both posted falls in their respective private sectors.

‘The region is on course to see a mere 0.1% GDP growth in the final quarter of the year, with a strong likelihood of the near-stagnation turning to renewed contraction in the new year unless demand shows signs of reviving,’ Chris Williamson, chief economist at Markit said.

The Indian Rupee meanwhile was weaker due to the strengthening of the US Dollar and growing concerns over the health of the global economy.

The weakness seen in the Eurozone adds to concerns over China and Japan’s economies. Australia too posted weaker than forecast GDP data.

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