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Trading GBP/INR

Written By

Jemma Grist

Written By

Jemma Grist

Jemma is a writer, editor and fact-checker focused on retail trading and investing. Jemma brings a unique perspective to the forex, stock, and cryptocurrency markets and works across several investment websites as a researcher and broker analyst.

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Edited By

Tobias Robinson

Edited By

Tobias Robinson

Tobias is a partner at DayTrading.com, director of a UK limited company and active trader. He has over 25 years of experience in the financial industry and contributed via CySec to the regulatory response to digital options and CFD trading in Europe. Toby’s expertise and dedication to financial education make him a trusted voice in the industry, including a BBC investigation into digital options.

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Fact Checked By

William Berg

Fact Checked By

William Berg

William contributes to several investment websites, leveraging his experience as a consultant for IPOs in the Nordic market and background providing localization for forex trading software. William has worked as a writer and fact-checker for a long row of financial publications.

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Updated

Sep 14, 2024

Trading GBP/INR, or converting British pounds to Indian rupees, and back again, is one of the oldest forms of forex. The array of fundamental factors and news events that influence the pair, as well as the range 0f tools and forecast graphs that traders can take advantage of, make trading GBP/INR so popular. This guide will discuss all you need to know about the two currencies, including what the rate looks like today, and will provide you with some helpful tips for technical chart analysis for trading GBP/INR.

GBP/INR Meaning

When trading GBP/INR, it is important to understand exactly what is being presented to you. This currency pair is the value of the British pound (GBP) against the Indian rupee (INR) and tells the trader how many Indian rupees (the quote currency) are needed to buy one British pound (the base currency).

Conversely, INR/GBP tells a trader how many pounds are needed to buy one rupee.

Chart

GBP/INR History

The GBP and INR have been closely linked for several hundred years since Great Britain colonised India. Due to the long history of the GBP/INR currency pair and its unique position on the currency market, it has become a favourite amongst forex traders. Individual investors have been known for trading GBP/INR to diversify their forex trading portfolios and strengthen their financial strategies.

Traditionally, the British pound (GBP) had always been exchanged on a gold standard. This was a system under which many countries fixed the value of their currencies to a specified amount of gold. As the INR was so closely associated with the GBP, it was also tied to the gold standard, despite being a silver coin.

Since the suspension of the gold standard in 1931, the GBP has been fiat money, with its value determined by its acceptance in the national and international economy. Indian rupees (INR) were first issued in the 18th century and the currency was decimalised in 1957. For those trading GBP/INR, the exchange rate has steadily increased over the last 20 years and saw higher levels in 2021 than in the five preceding years. The price reached an all-time high in April 2021.

The UK Economy

Understanding economic drivers will help traders to make better-informed decisions when trading GBP/INR. In January 2021, the Bank of England governor stated that the UK economy was experiencing its “darkest hour”. However, the economic outlook was stronger than that of its developed markets peers, which boosted the GBP, making it the best performing G10 currency in the first half of 2021.

It was predicted by the Organisation for Economic Co-operation and Development (OECD) that the UK economy would rise by 7.2% in 2021. This marks one of the fastest increases among the developed economies and tips its GDP growth on a par with India’s.

Some of the UK’s top exports include cars, precious metals and minerals, various machinery, pharmaceuticals, financial services and much more. These types of products are often in high demand, meaning the pound is often on an incline. With the UK’s inflation rate lower than that of many other countries, its purchasing power is therefore higher. This is one reason why the pound exchange rate is almost always strong, which is noticeable in the high rate for trading GBP/INR.

Role Of The Pound

The GBP is the fourth-most traded currency traded in the forex market, after the USD, EUR and JPY. It is the oldest actively traded currency on the forex market and, as of mid-2021, the GBP is the fifth-most held currency in global reserves.

The Indian Economy

India’s diversified economy experienced rapid growth in recent years thanks to its services and farming industries, the latter of which over half of India’s workers rely on. India is the sixth-largest global economy, directly after the UK in fifth, so trading GBP/INR does involve some big players. It also has one of the largest populations among nations, with more than 1 billion inhabitants. Since the 1990s, India’s economy has been quite liberal, which has helped to boost economic growth over the last 20 years.

India is a cash-based economy, facilitating fake currency circulation by those engaged in criminal activities. The Reserve Bank of India (RBI) often updates rupee notes to enhance security and prevent fraud. However, widespread corruption, inflexible business regulation and ongoing poverty are factors that prohibit India’s economy from expanding even further and may limit the impacts on trading GBP/INR.

Role Of The Rupee

The Indian rupee (INR) is legal tender for the 1.3 billion people living in India. The rupee has experienced a decline against major currencies like the GBP, USD and EUR over recent decades, as a result of market forces.

Factors Affecting GBP/INR Price

Many factors can cause a shift in the GBP to INR daily chart and weekly forecasts. These include:

• Central Bank Policy – The GBP/INR exchange rate is primarily affected by the Bank of England and Reserve Bank of India (RBI) reference rates.
• Inflation – Inflation rates can have a significant impact on trading GBP/INR. High inflation in the UK means there will be less demand for UK goods and therefore for the GBP itself. This will strengthen the INR against the GBP. However, UK inflation rates have barely been above 4% for nearly a decade, so this rise is not cause for too much concern. India currently targets a 4% inflation rate, with a tolerance of 2% and 6%. In December 2020, inflation in India dropped to 4.59%, the lowest since November 2019. This was driven by a decline in the prices of fruit and vegetables but gave the RBI opportunity to support the economy through lower interest rates. However, this ultimately put pressure on the INR.
• Interest Rates – Interest rates can also play a key role when carrying out exchange rate analysis for trading GBP/INR. It can significantly affect the INR as it has a direct impact on the foreign capital that is invested in India.
• GDP Growth Rate – Gross Domestic Product (GDP) measures the economic health of a country. In 2020, the UK overtook India in fifth place for largest GDP in the world. GDP performance and outlook can affect the GBP/INR rate on charts as currency values highly depend on the size and performance of economies.
• Sociopolitical Events – Social, economic and political events can create high volatility in the GBP/INR currency pair. For example, Brexit and more recently, extreme weather events, such as flooding caused by climate change, have put economies at risk. Traders hoping to make a profit from the GBP/INR pair would do well to keep on top of the latest news and political landscape.

Other things to consider include investment flows, trade flows and oil prices.

Day Trading GBP/INR Strategy

Trading Hours

Knowing when to begin trading GBP/INR is vital for achieving decent profit margins. The National Stock Exchange of India’s (NSE) trading hours are between 09:00 and 17:00 India Standard Time (IST). In the UK, this corresponds to 03:30 – 11:30 GMT.

Trading GBP/INR will be most liquid during the crossover of these hours and the opening times of the London Stock Exchange (LSE), which are 07:00 – 16:00 GMT. During these times, trading volume will be greater, slippage will be reduced and spreads will be tighter.

Brokers

Not all brokers will facilitate trading GBP/INR or INR/GBP, so investors should verify that their broker of choice offers it before opening an account. More and more large brokers are offering the GBP/INR pair along with a range of powerful technical analysis tools, charts, indicators and automated trading features. Some providers may also offer conversion services for GBP to INR and vice versa.

Data & Forecasting

Many traders focus on analysing current forex data to inform their positions. Monitoring a GBP vs INR live chart is key when opening and closing positions and executing trades. However, investors can also benefit from analysing historical information, including year-long graphs or the trend over the last five years. Maximising the use of as much financial data as is available is vital to making strong value predictions. Charts and other useful information for trading GBP/INR and INR/GBP can be found online on websites like TradingView.

Trade

Typically, currency demand is influenced by international trade. If a country exports more than it imports, the demand for goods is higher and, consequently, the same goes for its currency. When demand is high, prices rise and the currency appreciates.

There have been many decades of successful trade between the UK and India, which can be useful information when trading GBP/INR. However, total trade in goods and services (imports and exports) between the UK and India declined by 21.5% in the year preceding Q2 2021. India was also the UK’s 15th-largest trading partner for the same period.

In this post-Brexit period, the UK needs to renegotiate trade agreements individually with many partners. In May 2021, the UK announced a £1 billion trade deal with India and a commitment to negotiate a free trade agreement. Trade between the UK and India was around £23 billion in 2019, which both countries hope to double by 2030.

Following the volume of exports will help investors trading GBP/INR predict whether the pound will strengthen against the rupee, or vice versa.

Linked Currency Pairs

Those forex investors considering trading GBP/INR may want to refer to previous data like an exchange rate history chart or long-term forecasts to inform their trading strategy. Another way of generating a GBP to INR prediction for 2021 and beyond is to consider the effect of correlated currency pairs. These are currencies whose price changes are often in line with each other.

Correlation is a statistical measure of how two variables relate to each other. Positively correlated currency pairs will display movement in the same direction, whereas negatively correlated currencies move in opposite directions.

• USD/INR – This pair is useful for trading GBP/INR as it tends to move in the same direction
• EUR/INR – GBP/INR is also positively correlated to this currency pair

However, correlations do not always stay stable and can change thanks to economic and political factors.

GBP/INR Forecast

When trading GBP/INR, it is vital that a trader keeps on top of future trends and predictions for tomorrow. Traders should note that a single technical analysis is often not enough to build a thorough GBP/INR forecast. Traders can look at GBR/INR weekly charts and also benefit from looking at the latest news to see how the currency pair is performing today versus yesterday and further in the past.

Most trading platforms have various types of live forex charts available for viewing and analysis. Daily or weekly candlestick charts are handy tools often used by those trading GBP/INR. Historical price charts are also provided by most top brokers, giving traders access to yesterday’s price as well as future exchange rate forecasts.

The GBP to INR reached its highest rate ever in April 2021, amounting to 105.17 INR.

Final Word On Trading GBP/INR

Trading on the exotic currency pair GBP/INR is popular amongst day traders. The GBP remains historically strong against the INR but, as a highly volatile pair, this is always subject to change. Numerous economic factors can influence the GBP and the INR but knowing what data to use to make forecasts and predictions will be a trader’s biggest challenge with this pair. Before you start trading, make sure you’re keyed up on the various influencing dynamics that can affect trading GBP/INR. Strong technical analysis tools and skills, alongside an awareness of current news events, will put you in the best place to begin trading this pair.

FAQs

How Do I Start Trading GBP/INR?

In order to start forex trading GBP/INR, investors should find a broker with a strong exotic pair offering. Before setting up an account with a broker, check that the pair is available but also compare spreads and commission fees, as well as the important technical analysis tools on offer.

What Is The Highest Ever GBP To INR?

Trading GBP/INR reached its all-time high in April 2021 at 105.17 INR.

Why Is GBP Stronger Than INR?

Today, the Indian rupee’s value is lower than the GBP and this has historically been the case. However, many factors influence the exchange rate and the performance of the British and Indian economies could see a reversal in the overarching historical trend.

What Factors Are Affecting The GBP/INR Rate?

Various factors should be considered when trading GBP/INR. Keeping on top of the latest news is always key. Economic developments play an important role as well as political events, such as Brexit.

Will The GBR/INR Get Stronger In 2022?

India relies on a variety of industries and commodities, meaning it has significant growth potential. Forecasts indicate that the GBP/INR could see a change. As stronger currencies weaken, a short-term spike could appear in emerging markets like India, which would present a good opportunity for traders to take advantage of trading GBP/INR. Keep an eye on forecasts and charts online to make sure you’re clued up.