Greater clarity over brexit continues to underpin pound indian rupee exchange rate _ currency news uk


The British Pound to Indian Rupee exchange rate failed to return to the week’s best levels on Friday afternoon, as markets began to doubt Trump would take any immediate action after becoming US President in the evening.

As a result, investors took one last dip in risky emerging market currencies like the Indian Rupee, though the currency could plummet if Trump so much as hints at weaker trade ties and allow GBP/INR to advance.

Volatile risk appetite and an increased sense of clarity over the UK government’s plans for Brexit have helped the Pound Sterling to Indian Rupee (GBP INR) exchange rate to trend higher this week.

While the initial positive reaction to Theresa May’s speech on Brexit diminished later in the week the underlying trend of the Pound remained positive, with markets encouraged that some details of the strategy have finally emerged.

‘With UK politics now likely to go quiet until Article 50 is triggered, the greater downside risk for GBP is that a constant diet of upside data surprises has left markets a little complacent on UK growth and the early Q1 indicators should be watched closely. Msn news video The December RICS house price balance came in at 24 (consensus unchanged at 30). Eur usd exchange rate history Although this is the first fall since July, at its current level the index remains consistent with high-single-digit house price inflation.’

Even though the ultimate outcome of negotiations with the EU remains unclear, and the UK looks set to face increased trade barriers with its nearest neighbours, this is not likely to particularly weigh on Sterling in the short term.

Weakness in the US Dollar (USD) has offered support to the Rupee (INR) recently, with the risk appetite of investors fluctuating ahead of the US inauguration on Friday.

The Rupee was also offered a boost by the deteriorating price of oil, as rising US production threatened to undermine OPEC’s output cuts and ensure that the global oversupply glut persisted.

Given that India is a net importer of oil this development proved encouraging, although the relative strength of Sterling prevented the GBP INR exchange rate from softening in response.

With further market volatility likely ahead of the weekend the Rupee may struggle to find any traction against the Pound, especially as fresh domestic data is lacking in the near future.

UK retail sales are forecast to have risen 7.5% on the year in December, which would indicate that consumers had continued to spend heavily in spite of the uncertainty surrounding the UK’s future outside the EU.

A strong showing here would boost the Pound, even though rising inflation and increasing pressure on wages are likely to diminish the spending power of consumers in the coming year.

If growth in the world’s second largest economy is found to have remained upbeat at the end of 2016 then a fresh surge in demand for emerging-market assets could ensue, to the benefit of the Rupee.