GBP INR Exchange Rate Slides as Fund Manager Bets against the Pound

May 24, 2017 - Written by Tim Boyer

STORY LINK GBP INR Exchange Rate Slides as Fund Manager Bets against the Pound

The Pound Indian Rupee (GBP INR) exchange rate slid on Wednesday afternoon as BlueBay Asset Management warned that Sterling is likely to tumble whatever the outcome of the UK’s elections.

Analysts as the firm suggests that the Pound is likely to drop below $1.20 by the end of the year and that a hard Brexit between the UK and Europe is now inevitable, with tough comments from both sides signalling that negotiations are likely to be quite chilly.

This follows comments by Brexit Secretary David Davis at the start of the week who suggested that the UK government could walk away from negotiations if it felt talks were unfavourable, with particular attention being paid to the UK’s ‘divorce bill’ which analysts predict could be anywhere as highs as €100.

Mark Dowding, a fund manager at BlueBay said;

‘We’ve literally gone short the pound at the end of last week. We think you’re going to be facing a Brexit that to us looks like it’s going to be a hard Brexit.’

Dowding also cast doubts over the government’s plans for the upcoming Brexit talks, labelling them an ‘unrealistic pipe dream’.

Meanwhile the Indian Rupee has also suffered in trading today as border tensions between India and Pakistan worried investors.

This follows ‘punitive fire assaults’ made by the Indian army yesterday on Pakistani military posts along the border in the Kashmir region.

Army spokesman Ashok Narula said that the attacks had been made to prevent Pakistan from helping militants cross the border, a measure that the Indian government hopes will discourage local youths from also taking up arms.

The attacks led investors to shy away from the Rupee amidst fears that the border skirmishes may erupt into a wider conflict, which could destabilise the region.

India and Pakistan frequently clash over the disputed Kashmir border, which has seen a surge in violence in recent months, with India's Hindu nationalist BJP government stepping up its military presence as it accuses Islamabad of provocations in the region and stirring up recent protests.

Looking ahead the GBP INR exchange rate may slide on Thursday as economists predict that the UK’s latest GDP estimate will confirm that economic growth sank from 0.7% to 0.3% at the start of 2017.

The Pound may also be weakened by the release of the BBA’s Mortgage figures for April, with analysts forecasting that new loan approvals will slide from 41,100 to 40,800.

Current Interbank Exchange Rates

At the time of writing the GBP INR exchange rate was trending around 83.8550 and the INR GBP exchange rate was trending around 0.0119.

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TAGS: Pound Rupee Forecasts