GBP/INR Outlook:
The GBP/INR rate is likely to increase, currently trading above its 90-day average and near recent highs. Political uncertainty in the UK and mixed domestic indicators could create volatility for the Pound.
Key drivers:
• Rate gap: The Bank of England's more dovish stance on interest rates contrasts with the Reserve Bank of India's flexible exchange rate policy, impacting GBP attractiveness relative to INR.
• Risk/commodities: Global oil price fluctuations are influencing India's trade balance, which could impact demand for INR and affect its valuation against GBP.
• One macro factor: Political uncertainty in the UK, amplified by recent events, has introduced additional volatility that may pressure GBP in the short term.
Range:
GBP/INR is expected to drift within its recent range as uncertainties moderate price movements.
What could change it:
• Upside risk: Strong UK economic data could bolster the Pound's resilience.
• Downside risk: Continued political instability may weigh heavily on GBP, leading to potential declines.