The Pound Sterling to Indian Rupee (GBP/INR) exchange rate was trending within a tight range on Wednesday morning.
After British economic data produced disappointing results, the Pound softened against the majority of its currency rivals. Of particular detriment was below-forecast services growth given that the services sector makes up the majority of the UK’s gross domestic product.
The Indian Rupee, meanwhile, dived across the board after domestic data showed India’s services moved from growth into contraction in May. The depreciation has been somewhat slowed, however, thanks to a soft US Dollar and falling oil prices.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate is currently trending in the region of 97.8680.
Pound Sterling (GBP) Exchange Rate Forecast to Soften Versus Euro despite Greek Concerns
British data produced disappointing results on Wednesday, causing Sterling to slump versus most of its rivals. The BRC Shop Price Index saw an annual declination of -1.9% in May; a greater contraction than the median market forecast -1.8%. Nationwide House Prices failed to meet with the market consensus on both an annual and a monthly basis in May. In addition, Markit/CPIS UK Services PMI came in at 56.5 in May, much lower than the estimate of 58.73.
In reaction to the services data, Chief Markit Economist Chris Williamson stated; ‘Recent weakness in manufacturing and construction has spread to services. Overall growth in May across all three sectors was the lowest since December and the second-weakest for two years. The surveys point to GDP growing at a quarterly rate of just 0.4% in May, raising doubts about the ability of the economy to rebound convincingly from the weakness seen at the start of the year. The lacklustre growth picture will be a concern to policymakers and effectively kills off the chances of any imminent hiking of interest rates by the Bank of England (BoE).’
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate dropped to a low of 97.5840.
Indian Rupee (INR) Exchange Rate Forecast to Dive versus the US Dollar despite Falling Crude Prices
Despite the fact that the US Dollar is generally trending in a weak position, the Rupee slumped versus many of its competitors. The depreciation can be linked to a particularly disappointing Services PMI, which dropped from 52.4 to 49.6; breaking through the 50 barrier which separates growth from contraction.
Commenting on the India Services PMI survey, Pollyanna De Lima, Economist at Markit said; ‘Disappointing May PMI data for India services indicated that the sector fell back into contraction after experiencing growth for six successive months. Restrained demand accompanied by sweltering heat and the earthquake led to falling new work. Nonetheless, the sector is expected to see a rebound in coming months, as these factors fade away. An upturn in employment combined with improved business confidence further add to the evidence that prospects may brighten. The manufacturing economy has moved up a gear with production and new order growth the strongest since January. This kept the private sector in positive terrain, with output and new work expanding for the thirteenth straight month.’
Pound Sterling to Indian Rupee (GBP/INR) Exchange Rate Forecast to Fluctuate on US Dollar Movement
With the emerging-market Indian asset sensitive to US Dollar movement, and with US data due for publication later, the Pound Sterling to Indian Rupee (GBP/INR) exchange rate is likely to fluctuate over the course of Wednesday’s European session. Thursday ought to see GBP/INR movement with the BoE interest rate decision due for publication.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate climbed to a high of 98.3240 today.
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