Sterling Pound Write Up : GBPINR Spot to cross 104 mark, fundamentals at play Says Ms. Heena Naik, Angel One
Below is on Sterling Pound Write Up By Ms. Heena Naik, Research Analyst, Currency, Angel One Ltd.
Sterling Pound has been on the rise since the past two months. GBPUSD has surged by more than 5 percent since Mar’23. This has influenced GBPINR trend as well however the influence is not as strong as GBPUSD, thanks to the Indian Rupee. So, what is causing the Pound to rise beyond and farther?
Starting with US Dollar Index, the American currency has plunged by more than 3 percent since the month of Mar’23 which in turn has positively impacted the Pound currency. Apparently, the Federal Reserve in a bid to control inflation has been less aggressive than some might have expected which has caused major losses in US Dollar. To add further misery, the March 2023 collapse of a brace of banks and other related frailties in the banking sector have dented international confidence in the US’s economy.
Another reason for the rise in Pound value is the natural gas prices. NG prices which once upon a time had spiked dramatically after Russia’s invasion of Ukraine, has now fallen back to pre-war levels much quicker than expected. This has worked in favour of Sterling Pound considering that UK imports a lot of natural gas.
On the domestic front, UK’s economy is holding up better than expected as economic activities have revived. This resilience is bolstering expectations the Bank of England will maintain aggressive interest rate hikes despite concerns about the health of the global banking sector. Rising rates can boost the domestic currency because they help attract foreign investors searching for higher returns.
Having said that, all the above factors are playing with the investors minds and has kept the Sterling Pound in the bullish arena. GBPINR Spot (CMP: 103.37) is likely to cross the 104-mark, break of same could push the currency towards 104.40 and higher levels.
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