The GBP to INR exchange rate has rallied in the past four straight days as the British pound gets its swag back. It rose to a high of 100.62, which was the highest point since December 20th. The pair has risen by more than 2.35% from its lowest point this year as investors react to the latest UK inflation and jobs numbers.
UK inflation data
The GBP/INR price rose after the UK published the latest inflation data. According to the Office of National Statistics (ONS), the country’s inflation remained unchanged at 0.4% on a Month-on-Month basis. It then dropped from 10.7% in November to 10.5% in December. Core inflation, which excludes the volatile food and energy prices, rose from 0.3% to 0.5% in December. This led to an annual growth rate of 6.3%.
These numbers show that the country is still facing major inflation challenges. Coupled with the positive jobs numbers that were published on Tuesday, analysts believe that the bank of England (BoE) has no choice than continue hiking interest rates in the coming months.
These numbers showed that the country’s unemployment rate remained at 3.7% in November while the number of claims rose by 19.7k in December. Average earnings ex bonuses rose by 6.4% while with bonuses it rose at the same pace. Therefore, these numbers mean that the BoE has more room to hike going forward.
On the other hand, the Reserve Bank of India (RBI) has a smaller incentive to keep hiking interest rates. As such, this explains why the GBP to INR exchange rate has been rising recently despite the rising recession risks in the UK. Recent data shows that the country’ economy avoided a recession slightly in the fourth quarter of the year.
GBP to INR forecast
The daily chart shows that the GBP to INR exchange rate made a bullish breakout after the UK published strong GDP data. It has moved slightly above the upper side of the descending channel shown in red. The pair is being supported by the 25-day and 50-day moving averages. Its Relative Strength Index (RSI) has moved above the neutral point of 50.
Therefore, the pair will likely continue rising as buyers target the key resistance level at 102.70, which was the highest point in 2022. A drop below the support at 99.20 will invalidate the bullish view.