The Pound to Rupee (GBP/INR) exchange rate traded near 127.06 on Monday, retreating from recent highs as the Indian Rupee found support following a pullback in oil prices and an improvement in broader risk sentiment.
Latest — Exchange Rates:
Pound to Rupee (GBP/INR): 127.0633 (-0.67%)
Month-to-Date: -0.58%
Year-to-Date: +4.82%
DAILY RECAP:
GBP/INR came under pressure after failing to hold above the 128 handle.
The pair has eased over the past week, slipping 0.25% from levels above 129.50 as the Rupee staged a modest recovery.
The move has been driven largely by developments outside India.
A sharp pullback in crude oil prices provided support for the Rupee after weeks of pressure linked to the US–Iran conflict and concerns over global energy supplies.
Lower oil prices are particularly important for India given its dependence on imported energy.
The resulting improvement in the inflation and trade outlook helped the Rupee regain some ground against major currencies.
At the same time, importer Dollar demand remained lower than earlier in the month, reducing pressure on the currency.
Sterling has also lost some momentum.
The Pound remains supported by expectations that the Bank of England will take a cautious approach towards policy easing, but recent gains have stalled as markets reassess the UK growth outlook.
In a recent client note, ING highlighted that markets remain sensitive to incoming UK inflation data, with rate expectations still a key driver of Sterling performance.
MUFG also noted that commodity-linked moves continue to dominate emerging market currencies, with oil remaining a particularly important factor for the Rupee.
Despite the recent pullback, GBP/INR remains more than 3% higher than a month ago and continues to trade well above levels seen at the start of the year.
Near-Term GBP/INR Forecast: UK CPI and Oil Prices to Drive Direction
For Pound Sterling, the key event this week is UK CPI inflation data (Wednesday).
Markets will be watching closely to see whether price pressures remain elevated enough to keep the Bank of England cautious on rate cuts.
A stronger-than-expected inflation reading could provide fresh support for the Pound.
Attention will then turn to UK retail sales data (Friday), which should offer a clearer picture of consumer spending conditions.
For the Indian Rupee, oil prices remain the dominant driver.
Any further decline in crude would improve India’s inflation and trade outlook and could support the currency.
Markets will also monitor developments in global risk sentiment and any signs of further intervention by the Reserve Bank of India.
If UK inflation surprises to the upside while oil prices stabilise, GBP/INR could recover towards 128.50.
However, softer UK data and a continued retreat in crude prices could see the pair move back towards 125.50.
In the near-term, Exchange Rates UK Research forecast that the Pound to Rupee exchange rate will trade within the 125.50–128.50 range.
