Pound to Indian Rupee Exchange Rate Firms on UK Mortgage Approvals Data

March 25, 2015 - Written by Tim Boyer

STORY LINK Pound to Indian Rupee Exchange Rate Firms on UK Mortgage Approvals Data

The Pound firmed from the previous sessions decline against the Indian Rupee as the UK currency received support from a better than forecast report on UK mortgage approvals. The Indian currency meanwhile weakened due to an increased demand for US Dollars from the nation’s importers.

Earlier in the week, the Pound had weakened against the Indian Rupee and most other major peers after data showed that inflation in the UK fell to a record low level of zero. The fall in consumer prices caused economists to raise their bets that the Bank of England is now just as likely to cut interest rates, as it is to raise them.

The currency found support in today’s session however as data released by the British Bankers Association (BBA) showed that the number of mortgages approved climbed to the highest level in five-months in February, easing some of the concerns that the UK housing market is experiencing a slowdown.

The number of mortgages approved for house purchases rose to a seasonally adjusted 37,305 in February from 36,517 in January. This was the highest since September 2014. The figure was expected to rise slightly to 36,650. House purchase approvals are starting to trend upwards. Though February was 20% lower than last year, early 2015 are seeing higher demand, the BBA said. The value of mortgage approvals remained unchanged at adjusted £ 6.2 billion in February. The number of total mortgages increased to 61,361 from 58,881 in January and the value rose to £9.6 billion from £9.3 billion.

‘The increase in mortgage approvals between January and February is welcome news and a sign that the housing market is beginning to improve. We are seeing stronger demand for mortgages as consumers take advantage of some of the very competitive deals currently available. Demand for loans and other types of personal borrowing are rising at its fastest rate since the financial crisis. Consumers are feeling increasingly confident about buying big ticket items, such as cars or home improvements, as the recovery really begins to take hold’ said BBA chief economist Richard Woolhouse.

The Indian Rupee meanwhile was under pressure due to month end US Dollar demand from importers. Against the Dollar the Rupee advanced after Federal Reserve policymaker Charles Evans said that there is no compelling reason for the Fed to be in a hurry to tighten financial conditions.

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