Pound Sterling to Indian Rupee (GBP/INR) Exchange Rate Forecast to Soften as Oil Price Tanks

The Pound Sterling to Indian Rupee (GBP/INR) exchange rate declined by around -0.35% on Tuesday morning.

A complete absence of domestic data has seen the Pound soften versus many of its major peers. This is mainly due to rising political uncertainties as the forthcoming general election is clouding the outlook for the British asset.

The Indian Rupee, meanwhile, strengthened versus many of its major competitors as a result of oil prices sliding to below $44 a barrel. The advance has been somewhat laboured, however, amid speculation that the Reserve Bank of India (RBI) will be forced to cut interest rates to accommodate for negative inflation.

The Pound Sterling to Indian Rupee (GBP/INR) exchange rate is currently trending in the region of 92.6710.

Pound Sterling (GBP) Exchange Rate Softens ahead of General Election

The forthcoming British general election is expected to be the most hotly contested and closely fought in modern political history. With little to separate the larger political parties, and with more parties incorporating a referendum on Europe into their policies, trader reluctance to invest has seen the Pound slump versus many of its major peers.

In addition to political uncertainties weighing on demand, a complete absence of domestic data to curb the trend has seen further declination on Tuesday. This, coupled with recent dovish remarks from Bank of England (BoE) officials, is likely to weigh on sentiment towards Sterling for the remainder of Tuesday’s trade.

The Pound Sterling to Indian Rupee (GBP/INR) exchange rate has fallen to a low today of 92.6010.

Indian Rupee (INR) Exchange Rate Ticks Higher despite RBI Rate Cut Speculation

On Monday, Indian wholesale price data showed inflation declined and remained in negative territory. Speculation that the RBI will have to counteract deflation with a rate revision saw the Rupee slump versus many of its major peers.

However, crude prices have taken such a dramatic dip over the past few days that the Rupee has advanced versus many of its most traded currency competitors. The slide in prices has been attributed to oversupply in the US, and the Indian economy benefits as one of the foremost crude importers.

‘The US is aflood with oil and other production points around the world are not letting up in their output. The question is how much more oil can we take before the storage tanks hit capacity?’ said Gene McGillian, senior market analyst at Tradition Energy in Stamford, Connecticut.

Pound Sterling to Indian Rupee (GBP/INR) Exchange Rate Forecast to Hold Losses

With downward pressure on the Pound from political uncertainties, crude prices showing no sign of a quick recovery and a complete absence of domestic data to curb the trend, the Pound Sterling to Indian Rupee (GBP/INR) exchange rate is likely to hold losses for the remainder of the European session.

Wednesday is likely to see heightened GBP/INR volatility with British labour market data due for publication. Oil prices will be the driving force for the Rupee due to a lack of domestic data to provoke movement.

The Pound Sterling to Indian Rupee (GBP/INR) exchange rate advanced to a high of 95.2750 today.