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Pound to Indian Rupee Exchange Rate Rises After Data Releases

February 18, 2015 - Written by Tim Boyer

Pound Sterling to Rupee (GBP/INR) Exchange Rate Today



The Pound made strong gains against the Indian Rupee and other major peers after economic data releases showed that UK unemployment fell unexpectedly in the final quarter of 2014 and wages increased more than forecast. The positive data raised speculation that the Bank of England (BoE) could hike interest rates sooner than previously forecast.

The Indian Rupee was weakened following the UK data releases and as market attention looks ahead to the publication of the minutes for the Federal Reserve’s February policy meeting. Earlier in the session, losses for the Indian Rupee were restrained as a Wholesale price index fell for the second time in three months last month as oil prices fell. Wholesale food inflation however increased to a six-month high of 8% from 5.2%. The drop in prices is likely to increase pressure on the Reserve Bank of India to make more interest rate cuts.

The Pound Sterling meanwhile found support from data released by the London based Office for National Statistics (ONS) showed that UK unemployment fell to its lowest level in six years. The overall jobless rate fell from 5.8% to 5.7% and beat economist expectations for an unchanged figure of 5.8%. The data also showed that the number of UK citizens claiming unemployment benefits declined by 38,600 last month, the figure beat expectations for a decline of 25,000. December’s figure was revised to a fall of 35,800 people from a previously reported decline of 29,700.

Data also showed that the U.K. average earnings index, including bonuses, rose 2.1% in the three months to December, above forecasts for 1.7% and after increasing by 1.8% in the three months to November. Excluding bonuses, wages rose by 1.7% in the three months to December, below expectations for a gain of 1.8% and following a 1.8% increase in the three months to the minutes of the Bank of England's February policy meeting showed that members voted unanimously to keep its quantitative easing program on hold.
Members also voted unanimously to keep interest rates unchanged at a record-low 0.5%

The Indian Rupee is likely to depreciate further as investors will be cautious ahead of the publication of the Federal Reserve meeting minutes. However, optimism in Asian markets will likely restrict a sharp downside movement.

Any sign that policy makers are moving against raising interest rates the Rupee will likely advance as the US Dollar falls.

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