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Pound to rupee (GBP/INR) double tops after strong UK GDP data

By: Invezz
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The GBP/INR exchange rate moved sideways on Friday after the strong UK GDP, manufacturing, industrial, and construction output numbers. The pound to Indian rupee pair was trading at 104.41 on Friday, a few points below the year-to-date high of 106.8.

Strong UK GDP data

The GBP/INR pair reacted mildly to the latest UK GDP numbers. According to the Office of National Statistics (ONS), the British economy expanded by 0.1% in February, in line with expectations.

The economy contracted by 0.2% from the same period in 2023. This contraction was better than the median estimate of -0.4%. 

Further data showed that the manufacturing production rose to 1.2% while the industrial output jumped by 1.1%. The two figures were better than the expected 0.1% and 0.0%, respectively.

Meanwhile, the British trade deficit came in at £14.2 billion, better than the expected £14.50 billion.

GDP is estimated to have grown 0.1% in February 2024:

▪️ Services grew (+0.1%)
▪️ Production grew (+1.1%)
▪️ Construction fell (-1.9%)


— Office for National Statistics (ONS) (@ONS) April 12, 2024

These numbers mean that the Bank of England (BoE) will maintain interest rates will remain quite hawkish this year. Traders have now scaled back their bets for rate cuts to two this year.

The GBP/INR also reacted to last week’s Reserve Bank of India (RBI) decision. In it, the bank decided to leave interest rates unchanged for the seventh straight month.

The bank also hinted that it would maintain higher rates for longer as inflation has remained above its target of 4%. There are signs that India’s inflation will remain steady as a heatwave continues in the country.

The next important GBP/INR news will be the upcoming British inflation numbers scheduled for Wednesday. Economists believe that the country’s inflation continued easing this month.

A report published on Thursday showed that UK’s energy prices will continue falling in the coming weeks. Wholesale power prices are expected to drop to £82 a megawatt-hour in the 2024/25 period.

GBP/INR technical analysis

GBP/INR chart by TradingView

The GBP to INR exchange rate drifted downwards after the strong UK GDP numbers. On the daily chart, the pair has moved slightly below the 50-day and 25-day Exponential Moving Averages (EMA).

It is nearing the important support level at 104.10, its lowest swing in February and the neckline of the double-top pattern. The MACD and the Relative Strength Index (RSI) have continued falling.

Therefore, because of the double-top pattern, there is a likelihood that the pair will have a bearish breakout as bears target the support at 100.

The post Pound to rupee (GBP/INR) double tops after strong UK GDP data appeared first on Invezz

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