May 28, 2014 - Written by James Fuller
STORY LINK Pound Rupee Exchange Rate (GBP/INR) Sinks, Dollar Rupee (USD/INR) Strengthens
Although the Rupee declined to a two-week low against the US Dollar on Wednesday the Indian asset strengthened against a struggling Pound.
The Rupee slipped against its US counterpart as importers snapped up a higher proportion of US Dollars in order to meet month-end shipment costs.
The news that India’s central bank had loosened restrictions on the amount of foreign currency purchasable from the onshore forwards market also pushed the Rupee lower against the ‘Greenback’.
According to The Business Line; ‘Dollar’s strength against other currencies overseas on the back of encouraging economic data also put pressure on the local unit but a higher opening in the domestic equity market limited the fall. [...] Extending its losses for the fourth consecutive day, the Rupee has been weakening on expectations that the central bank will not let the domestic unit appreciate further.’
While the Rupee was struggling against the US Dollar, it was enjoying a more upbeat relationship with the Pound as the British asset weakened in response to disappointing domestic data.
Yesterday’s below-forecast British Bankers’ Association mortgage approvals report indicated that the UK’s overheated housing market might be cooling off and slightly reduced the pressure on the Bank of England to introduce and interest rate increase sooner rather than later.
As a result the Pound broadly softened, posting modest losses against the majority of its peers.
The Rupee’s stronger relationship with Sterling continued on Wednesday as the Confederation of British Industry’s reported sales figure fell short of forecasts.
Instead of rising from +30 to +35 in May as expected, the CBI reported sales gauge dropped to +16.
After six months of steady sales increases this result was something of a disappointment.
However, internet sales enjoyed a robust increase and growth in the retail sector remained strong overall.
Tomorrow movement in the GBP/INR exchange rate could occur as a result of the UK’s Lloyds business barometer, but investors will also be focusing on Friday and the publication of India’s foreign reserves, deposit growth, bank loan growth and GDP growth rate figures.
News from the US (including Thursday’s growth data) may also impact the Rupee.
The Pound Rupee exchange rate is currently trading at 98.7635 GBP/INR.
The US Dollar Rupee exchange rate is currently trading at 58.9800 USD/INR.
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TAGS: Daily Currency Updates Indian Rupee Forecasts Pound Rupee| Forecasts