The GBP to INR exchange rate currently holds a bullish bias as the pound strengthens against the rupee. Key drivers include the interest rate differential, with the Bank of England expected to ease rates while the Reserve Bank of India may adopt a cautious stance amidst potential rupee weakness. Additionally, the UK’s improving manufacturing index indicates modest economic resilience, while India's growth projections show signs of complexity, impacting currency performance.
In the near term, GBP to INR is anticipated to fluctuate within a stable range around its recent price, above its three-month average. This stability has been noted, with trading occurring within a 5.8% range recently.
An upside risk to this forecast could arise from stronger-than-expected UK economic data or a significant shift in U.S. monetary policy, invigorating the pound. Conversely, a downside risk may occur if inflation pressures in the UK prompt the Bank of England to act more aggressively in cutting rates than anticipated.