The Pound strengthened versus many of its rivals despite a slowdown in April’s Construction Output. On the month, Construction Output declined by -0.8%; failing to meet with the median market forecast 0.1% increase. However, on a yearly basis April’s Construction Output bettered the market consensus of a 0.5% increase, with the actual result reaching 1.5%. Furthermore, the previous figure was upwardly revised considerably from 1.6% to 5.0%. This was due to the Office for National Statistics (ONS) introducing a new way to calculate construction costs and prices. As a result of this new method of calculation, the ONS also upwardly revised Britain’s Gross Domestic Product for all of 2015 and the first-quarter of 2015.
‘The UK economic upturn over the past year has been stronger than previously thought after substantial data revisions show that the construction sector has not acted as such a drag on the economy. The revisions bring the economy’s performance more into line with recent survey evidence,’ stated Chris Williamson, chief economist at Markit.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate is currently trending in the region of 99.1910.
The Indian Rupee, meanwhile, gained after domestic data produced positive results. Manufacturing Production, Industrial Production and Inflation Rate all bettered respective market consensuses. ‘Both the IIP (industrial output) and CPI data augur well for the economy. The higher-than-expected IIP data corroborates with the solid indirect tax growth figures released by the Finance Ministry. The CPI data is better than what we expected. The last two readings have shown that food prices are not flaring up despite adverse weather conditions. This bodes well given the outlook for uneven monsoon distribution. Should CPI and food inflation continue to behave on similar lines January 2016 inflation may undershoot RBI's 6 percent estimate. While we still do not expect RBI to cut rates anytime soon, this data has increased the odds for a rate move later in the calendar year.’
The Rupee also gained as a result of falling oil prices. ‘US oil producers are working through a large backlog of drilled but uncompleted wells, which have a significantly lower cost hurdle to achieve production,’ National Australia Bank said on Friday. ‘Combined with sustained strength in OPEC production, the current glut situation is expected to persist for longer than previously expected, thus limiting the upward mobility in prices for the rest of 2015 and 2016,’ it added.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate was trending within the range of 99.1290 to 99.4460 during Friday’s European session.