Forecasts for GBP to INR
The British Pound to Indian Rupee (GBP/INR) exchange rate outlook appears to be shaped significantly by a confluence of both domestic and international factors that could influence the Sterling's broader performance. FX analysts from major institutions have issued a bearish outlook on the GBP, with forecasts predicting a potential decline against the US Dollar, which may subsequently impact its value against the INR. Wells Fargo, TD Securities, and Danske Bank all expect the GBP/USD to weaken, hovering around the 1.20 mark by early 2024, a move they attribute to an anticipated end of policy tightening by the Bank of England and the overall robust strength of the US Dollar. This sentiment resonates with the views from HSBC and Barclays, which signal a turning point for the Pound after having been previously optimistic. The observation that consumer confidence is wavering in the UK could be a harbinger of macroeconomic underperformance, further contributing to the expected Pound depreciation.
In contrast, the Indian Rupee's trajectory against the Dollar showcases a current bullish trend with the USD/INR exchange rate expected to oscillate within the 82-84 range, according to economists. The Rupee has felt pressure from factors such as high US Treasury yields, a weak Yuan, and particularly, rising crude oil prices—a significant point of vulnerability for India as a major oil-importing nation. The shock OPEC+ decision in April 2023 to cut oil production heightened these concerns, exacerbating the rupee's weakness. Moving forward, analysts anticipate that while these aforementioned factors will continue to affect the INR in the short term, some moderation is expected to offer support eventually, which could stabilize the INR's performance.
Considering the recent GBP to INR market movements, where the exchange rate stands at 105.3, which is 2.3% above the three-month average of 102.9, and has experienced a relatively stable 5.3% range of 100.5 to 105.8, the market view remains cautious. The GBP's high volatility and susceptibility to political and economic shifts, underscored by post-Brexit challenges, could lead to further fluctuations, potentially impacting the GBP/INR pair in the near to medium term. As often stated, 'Cable' tends to be momentum-driven, suggesting that the GBP/USD and, by extension, GBP/INR rates could encounter substantial volatility, moving in variable directions beyond typical forecasts.
