May 21, 2014 - Written by Tim Boyer
STORY LINK Rupee Exchange Rate Today: GBP/INR Boosted as Pound Sterling Benefits From UK Data Release
The news that the Bharatiya Janata Party dominated in India’s recent election and ousted the corruption-blighted Indian National Congress saw the Rupee achieve an 11 month high against the ‘Greenback’ and multi-month/week highs against several of its other major rivals over the last few days.
The Rupee has also been supported by comments issued by top ratings agency Moody’s Investor Service.
According to a report published by the institution; ‘Moody’s believes that the new Government’s strong mandate increases the possibility of a stable government that will pursue a shared economic agenda to address India’s macroeconomic challenges. India’s decisive election outcome is credit positive’.
Pound to Rupee exchange rate gains on unexpected UK data
However, the Rupee slid against the Pound on Wednesday as the British currency was supported by unexpectedly strong UK retail sales figures.
Importers also capitalised on the Rupee’s recent strength and snapped up Dollars, pushing the USD/INR exchange rate higher.
As stated by a locally based trader; ‘There is profit booking after the recent rally. We are seeing continuous bids from oil companies.’
Although the Rupee has still rallied by 2.5 per cent against the US Dollar this month, the emerging-market asset shed 0.4 per cent during local trading.
The Rupee also hit a low of 99.6080 against the Pound.
UK retail sales including autos increased by 1.3 per cent in April following a 0.5 per cent gain the previous month.
On the year sales were 6.9 per cent higher.
The Rupee was also feeling the pressure as investors adopted safe positions ahead of the release of the Federal Open Market Committee’s policy meeting minutes.
Given the dovish rhetoric adopted by Federal Reserve officials over the last few weeks, industry experts are expecting that the minutes will stress that interest rates will remain at record lows for some time to come.
Rupee forecast could see USD/INR movement
However, a shocking development could inspire USD/INR volatility.
US mortgage applications data will also be of interest.
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TAGS: Indian Rupee Forecasts Pound Rupee Forecasts Pound Sterling Forecasts