Pound to Indian Rupee Exchange Rate Firmer after mixed UK data

June 10, 2015 - Written by James Fuller

STORY LINK Pound to Indian Rupee Exchange Rate Firmer after mixed UK data

Pound to Indian Rupee Firmer after mixed UK data

The Pound Sterling to Indian Rupee exchange rate firmed to a session high following the release of mixed economic data out of the UK. The Indian currency meanwhile was experiencing light trading due to a lack of domestic market moving data releases impacting upon the currency’s movements.

Sterling advanced to a session high against a number of major peers including the Indian Rupee, Euro and US Dollar as economic data released by the London based Office for National Statistics (ONS) showed that industrial production in the UK increased more than forecast in April. Taking some of the shine off of the data release however was a separate report which showed that manufacturing production declined unexpectedly.

The data showed that industrial output increased by 0.4% month on month, a softer figure than the revised 0.6% figure seen in March but better than the 0.1% rise forecast by many economists. On a year on year basis industrial production was shown to have increased from the previous month’s revised figure of 1.1% to 1.2%. Economists had been expecting a figure of 0.6%.

In contrast, manufacturing production on a year-on-year basis were shown to have risen by 0.2% in April, below the 1% revised figure seen in the previous month and below expectations for a rise of 0.4%. On a month-on-month basis, manufacturing production fell by -0.4%, wiping out the 0.4% gain seen in the preceding month. Economists had been forecasting for a rise of 0.1%.

Pharmaceuticals output, which accounts for almost 9 percent of manufacturing, fell 6% in April following a 6.8% increase the previous month. Seven of 13 manufacturing sectors posted declines.

‘Prospects for production over the rest of the second quarter look fairly subdued and exporters face an additional burden from signs that the Euro-zone’s recovery may already be losing steam. Notwithstanding their recent performance, the contribution of the ‘makers’ to growth continues to look fairly uncertain,’ said Martin Beck, an economist at EY Item Club.

The Pound Sterling to Indian Rupee is forecast to experience further movement at the end of the week due to the release of UK construction output data and Indian industrial production, inflation rate and manufacturing production.

On a year-on-year basis Indian industrial production is forecast to fall from 2.1% to 1.6% in April. Inflation is expected to rise from 4.87% to 5%. Manufacturing production however is forecast to rise from 2.2% to 4.12%.

Also of interest will be Indian foreign reserves, deposit growth and bank loan growth reports.

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