After weakening against several of its major currency rivals yesterday, the Pound recovered some losses as European trading progressed but remained at a modestly lower level against the Rupee.
As investors got over the disappointment of a below-forecast UK services report and processed George Osborne’s remarks regarding further spending cuts, Sterling edged up slightly against the US Dollar and gained on the Euro as it broadly declined following the release of concerning inflation data for the Eurozone.
The Pound was little affected as the British Chambers of Commerce quarterly economic survey pointed at UK growth of 0.9 per cent in the three months to December, the best quarterly growth of 2013.
A BCC economist observed; ‘With most key balances in this quarter higher than their pre-recession levels in 2007, it is clear that the UK recovery is likely to continue to strengthen in the short term’.
Meanwhile, the Rupee softened against the US Dollar for a second day as persistent signs of Indian economic weakness lessened the asset’s appeal.
Yesterday’s services PMI report for India showed that the sector contracted for a sixth month at the end of last year.
This result, coupled with the slump in the nation’s manufacturing sector, supports the Reserve Bank of India’s projection for a GDP increase of 5 per cent in the fiscal year ending March 31.
In a statement issued with yesterday’s services report economist Leif Eskesen noted; ‘The service sector continues to face headwinds, with weakening new business dragging down activity. On a positive note, inflation pressures are easing and optimism about the coming year is rising’.
Over the next few days there are several UK events to watch out for, including the release of domestic trade balance figures and the Bank of England’s rate decision (both taking place on Thursday).
While the BoE is expected to leave interest rates unchanged and the level of asset purchases unaltered, the tone adopted by the Monetary Policy Committee will be of interest given the better-than-forecast UK employment data seen last month and the connection between the nation’s unemployment rate and interest rate increases.
Friday’s stream of economic data for India, including trade balance figures and industrial/manufacturing production reports, will also drive GBP/INR growth before the weekend.
Current Rupee (INR) Exchange Rates:
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The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 102.2370 <
The Euro/Indian Rupee Exchange Rate is currently in the region of: 85.0052 <
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 62.3600 <
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 56.6831 <
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 51.6216 <
The Canadian Dollar/Indian Rupee Exchange Rate is currently in the region of: 58.3684 <
(Correct as of 10:35 GMT)
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