The GBP to INR exchange rate has a bullish bias, currently trading at 7-day highs near 121.5, which is above its 3-month average of 118.5. This upward movement is partly due to positive signals from the Bank of England (BoE) regarding interest rates.
One key driver is the interest rate differential between the Bank of England and the Reserve Bank of India (RBI). The BoE's cautious approach indicates potential future interest rate cuts may be gradual, which could support the GBP. Conversely, predictions of the INR weakening toward 90 per USD highlight a weaker outlook for the Indian currency.
Additionally, UK retail sales data showing growth could bolster the pound, while India's economic outlook remains varied, with some forecasts suggesting a potential INR depreciation due to global factors and trade dynamics.
In the near term, the GBP to INR rate is expected to fluctuate within a stable range. Upside risks include stronger-than-expected UK economic performance, while downside risks may arise from significant geopolitical changes or unfavorable trade negotiations impacting the INR.