Pound Sterling to Rupee (GBP/INR) Exchange Rate Firms as Forex Markets Await FED

January 28, 2015 - Written by David Woodsmith

STORY LINK Pound Sterling to Rupee (GBP/INR) Exchange Rate Firms as Forex Markets Await FED

The Pound Sterling to Rupee (GBP/INR) exchange rate made gains as market attention turns to the evenings US Federal Reserve policy meeting and as sentiment towards riskier assets was knocked by speculation that the West will impose new sanctions against Russia.

Due to a lack of economic data releases from the UK and elsewhere, the GBP/INR exchange rate experienced muted trading. Economists turned their attention to events in the USA and Europe for guidance, in particular the US Federal Reserve’s policy meeting.

The US Dollar to Indian Rupee exchange rate today is converting at 63.64000 USD/INR.

In the previous session, the Rupee had been trading higher as it took advantage of a softened US Dollar. Data published in the previous session showed that business investment in the world’s largest economy eased for a fourth consecutive month in December. The non-defence capital goods orders excluding aircraft, a proxy for business spending plans, fell 0.6 percent in December following a similar drop in November.

"The drop in (capital spending) will weigh on growth, though stronger consumer spending should keep GDP from slowing too much," said Chris Low, chief economist at FTN Financial in New York.

The gains were short-lived however as a separate report showed that US consumer confidence jumped to its best level since June 2008.

US Dollar to Rupee Rate Today

The US Dollar then pushed higher ahead of the Federal Reserve policy meeting and interest rate decision. The Federal Open Market Committee is forecast to deliver a ‘steady as she goes’ view in its policy statement and leave interest rates on hold. If they do stick to such rhetoric, expectations will raise that interest rates in the worlds largest economy will rise in the middle of 2015. If however policy makers deliver a more dovish than forecast statement, we can expect the US Dollar fall and the Indian Rupee rise.

Rupee Exchange Rate Forecast

The Indian Rupee is also under pressure from risk aversion created by speculation that the USA and European Union will impose more sanctions against Russia as heavy fighting in eastern Ukraine escalates.

Also weighing on sentiment are concerns over the Eurozone and in particular, the New Greek government, which after being in charge for only one day has shown that it, is serious when it comes to sticking to its pledges to the Greek people.

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