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GBP INR Daily Exchange Rate News: Advance seen ahead of Key UK Inflation Figures

February 13, 2017 - Written by James Fuller

The British Pound to Indian Rupee exchange rate remained weak throughout Tuesday’s European session as the morning’s UK inflation data disappointed Sterling traders.

Strong demand for emerging market currencies like the Indian Rupee remained strong throughout the day, even after Federal Reserve interest rate hike bets improved following comments from Fed Chairwoman Janet Yellen.

[Previously updated 11:00 GMT]

Sterling slumped sharply across the board in response to the latest raft of UK inflation data, with investors unimpressed by the speed at which prices are currently rising.

With the Bank of England (BoE) expected to hold steady on monetary policy for the foreseeable future there was little reason to favour the Pound on Tuesday, leaving the GBP INR exchange rate on a weaker footing.

[Previously updated 13/02/2017]

GBP Demand Climbs ahead of Major UK Inflation Rate Figures

While today has been extremely quiet on the UK data front, the Pound has still risen against the Indian Rupee by 0.4%.

The most recent source of support for the Pound has been last week’s successful passage of the Article 50 bill through the House of Commons, though the lack of amendments proved concerning for some.

The bill has now been moved onto the House of Lords, although this story will resume next week when Parliament comes out of recess on February 20th.

GBP Volatility Incoming as UK Inflation Threatens to Overtake Wage Growth

Tuesday and Wednesday are expected to cause the most GBP INR fluctuation, with the arrival of inflation and averages earnings data.

In the former case, inflation is expected to rise on both the month and the year in January, though at present no acceleration in wage growth is forecast.

If inflation rises beyond estimates and earnings drop, the Pound could well crash against the Rupee, as such an outcome would provide solid fuel to fears that UK consumers will soon feel the sting of inflationary pressures.

INR Devalued by Inflation Rate Drop, Concerns Mount over RBI Action

The Rupee’s weakness against the Pound today is partly due to the strength of the US Dollar, but also on account of widening concerns about how the nation’s central bank is managing the national economy.

In the former case, Donald Trump’s promise to reveal spectacular taxation reforms in the future has boosted support for the US Dollar, conversely lowering interest in the Rupee.

In the latter, following a drop in inflation from 3.41% to 3.17%, the Reserve Bank of India (RBI) has found itself under scrutiny.

The RBA inflation target is around 4%, so while this drop does mean that consumers will have an easier time, it also heaps pressure onto the RBI to implement policy measures and rectify the situation.

Further INR Shifts Expected on Alternate Inflation Measures

Remaining Indian ecostats this week are due out on Tuesday and Wednesday, with a rise in WPI annual inflation in January being forecast for Tuesday morning.

Wednesday will see India’s trade balance announced; this previously posted a negative figure of -10.4bn.

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