January 7, 2015 - Written by Tim Boyer
STORY LINK Pound to Rupee Exchange Rate Weakens as Foreign Investors Buy Debts
The Pound fell to its lowest level since August 2013 against the Indian Rupee after the Indian currency was bolstered by improved risk demand in emerging markets and as foreign investors remained buying debts.
Dollar to Rupee Exchange Rate Today
Against the US Dollar, the Indian Rupee managed to advance to its best level in three weeks and was the best performing emerging Asian currency in the session. Also supporting the Rupee was a rebound in oil prices and a reduction in demand for the American currency ahead of the release of the Federal Reserve publishing its policy meeting minutes for December.
Sterling meanwhile remained under pressure following a string of disappointing economic data releases over the past week. Manufacturing PMI, Construction PMI and Service sector PMI data all came in below forecasts, causing economists to raise their bets that the Bank of England will choose to refrain from raising interest rates until later in the year.
‘There were some trade related receivables coming in today. Moreover, foreign institutional investors have come back to the market are now taking a view on India for their New Year allocations. These have worked in the Rupee’s favour,’ said the executive director from Mumbai based IDBI Bank Ltd.
The Rupee also advanced on speculation that the Indian Central Bank intervened in the currency market. Foreign investors are turning to the Indian Rupee on expectations that the Reserve Bank of India will choose to begin cutting interest rates by February as a response to rapidly falling inflation. Prices in the country have fallen markedly in recent months as oil prices tumbled and the price of gold dropped.
The Indian Rupee is forecast to experience volatility later in the session, as economists grow jittery ahead of the release of the minutes of the Federal Reserve’s December policy meeting. The minutes are likely to offer a clearer indication as to how hawkish Fed policy makers are towards an interest rate rise.
‘The ADP number is another indication that the economy is growing. The market is nervous ahead of the Fed minutes, and the text will indicate how hawkish the Fed members are,’ said a senior commodity broker at RJ. O’Brien and Associates in Chicago.
Update 1 – The Indian Rupee also rallied higher against the Euro as Eurozone economic data increased speculation that the ECB will have to introduce new monetary easing measures at this month’s policy meeting.
Update 2 – The Rupee is likely to maintain gains against the Pound if the latest interest rate announcement shows that policy makers are growing more dovish towards a rate hike.
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TAGS: Daily Currency Updates Dollar Pound Forecasts Indian Rupee Forecasts