The British pound is doing great in 2024. The GBP/INR exchange rate surged to 106.3 and is nearing its all-time high. Similarly, the currency has jumped against the US dollar, euro, and over 90% of all global currencies this year. The closely-watched British pound index has risen by over 6.70% from its lowest point in 2023.

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British pound is soaring

The GBP/INR exchange rate has jumped sharply because of the performance of the British economy. Recent economic numbers show that the economy is doing modestly better than feared initially. 

The economy contracted by 0.3% in the fourth quarter, moving into a technical recession. While this is a bad thing, it was better than most analysts expected. 

Further data has shown that the country’s wages have remained robust while the unemployment rate is low. The housing market has continued to tighten, with the house price index (HPI) jumping for six straight months. Retail sales have also been resilient.

All these events have led to expectations that the Bank of England (BoE) will not be in a hurry to cut interest rates as initially feared. 

Most economists believe that the BoE will start cutting rates in August. In contrast, the Reserve Bank of India (RBI) is expected to start rate cuts in June this year. Other central banks like the Fed and the European Central Bank will also start slashing rates in either May or June. 

These dynamics have made the sterling more resilient than the Indian rupee and other global currencies. 

The economic recovery may continue after the government unveiled a series of tax cuts last week. These cuts are expected to reach millions of UK citizens and possibly lead to strong recovery.

The big unknown for the UK this year is on what to expect in the general election. The expectation is that the Labour Party will win but it is unclear by how many votes. It is also unclear how the policies championed by the Labour Party will affect the economy.

GBP/INR technical analysis

GBP/INR chart by TradingView

The GBP/INR exchange rate has bounced back after bottoming at 104.03 in February. It is now approaching the important resistance point at 106.79, its highest swing in December.

The pair has also remained above the 50-day and 25-day Exponential Moving Averages (EMA) while the Average Directional Index (ADX) has moved to almost 20. The Relative Strength Index (RSI) has continued rising.

Therefore, the outlook for the GBP to INR exchange rate is bullish, with the next target to watch being at 107.95, its highest point in 2023.

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