The Pound Sterling to Indian Rupee (GBP/INR), South African Rand (GBP/ZAR) and US Dollar (GBP/USD) exchange rates were all trending in a softer position on Wednesday as Sterling extended and consolidated Tuesday’s losses.
Today’s Exchange Rate Forecast: GBP/EUR, GBP/USD, GBP/INR Decline as British Pound Tumbles on Pared BoE Interest Rate Hike Bets
After UK Manufacturing Production was shown to have fallen by -0.6% on the month in May, rather than rising the 0.1% expected, Sterling softened across the board. Industrial Production defied forecasts for a slight dip by climbing 0.4% on the month, but the concerning slide in manufacturing output had a bigger impact on the Pound’s performance.
Concerns that an overvalued Pound is hindering the UK’s economic outlook and could prompt the Bank of England to leave interest rates at record lows for longer ensured that Sterling closed out the local session in a weaker position not only against INR, ZAR and USD but also EUR and NZD.
As stated by Reuters; ‘Britain’s manufacturers have struggled to make much headway in recent months due to a combination of weak demand in Europe and the strengthening of the Pound against the Euro currency. A British employers’ group said earlier on Tuesday that Britain’s economy remained unbalanced in the second quarter when the dominant services sector grew but manufacturing was weak. A survey of manufacturers published last week showed growth in the sector was its slowest in two years.’
Pound Sterling to Indian Rupee (GBP/INR) Exchange Rate Forecast: Chinese Stock Market Impacts Rupee Trading
The Rupee might have been able to gain on a broadly softer Pound, but the Indian asset still opened the local session in a weaker position against the US Dollar. A poll conducted by the Economic Times also put the USD/INR exchange rate strengthening to as high as 65.50 over the next three months.
Industry expert Ananth Narayan commented; ‘We cannot ignore the possible impact of risk-off on emerging market capital flows. Also, with the Rupee overvalued by over 10% in REER terms, the RBI is likely to continue to mop up Dollars and arrest any significant Rupee appreciation.’
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate slumped from a high of 98.3140 during the European session, sliding -0.5% on the day’s opening levels.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast: FOMC Minutes to Drive Cable below 1.53 Today?
The Pound Sterling to US Dollar (GBP/USD) exchange rate moved even further away from June’s multi-month high of 1.57 on Tuesday, with risk aversion driving ‘Cable’ down 0.7% and to as low as 1.5356.
Although the fact that Greece has been given a few more days to hash out a deal did have a moderately soothing influence on risk appetite, trouble in the Chinese stock market kept the ‘Greenback’ trending broadly higher.
Should the minutes from the Federal Open Market Committee’s (FOMC) last policy gathering up the odds of a September rate adjustment, the GBP/USD pairing could test new lows.
However, dovish interest rate rhetoric may help Sterling recover ground.
Pound Sterling to South African Rand Exchange Rate Forecast: GBP/ZAR Steady, USD/ZAR at One-Month Low
While the Pound adopted a bearish relationship with the majority of its currency counterparts on Wednesday, the asset was able to trend in a narrow range against the South African Rand – with the GBP/ZAR pairing moving between highs of 19.3860 and lows of 19.1730.
The Rand also dropped to a month-low against a bullish US Dollar as the weakened Chinese stock market and lingering concerns about the likelihood of Greece brokering a deal with its creditors kept demand for commodity-driven emerging-market assets limited.
According to analyst John Cairns; ‘Dollar gains have been the major driver of Dollar/Rand upside this week. A sustained break in Euro/Dollar below 1.10 will result in Dollar/Rand testing new cyclical highs.’
The US FOMC minutes will also impact Rand trading today, with dovish minutes having the potential to lend the Rand support.
Current GBP, USD, INR, ZAR Exchange Rates
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate was trending in the region of 97.6740, the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.5358 and the Pound Sterling to South African Rand (GBP/ZAR) exchange rate was trending in the region of 19.2350