GBP/INR Exchange Rate Falls Despite Growing Concerns Over India’s Covid-19 Situation
The Pound to Indian Rupee (GBP/INR) exchange rate fell today, with the pairing currently trading around ₹94.73.
The Indian Rupee (INR) benefited from improving risk appetite today after it was revealed that Gilead Sciences Inc had recorded evidence that the antiviral drug Remdesivir reduced the risk of death in the severely ill from Covid-19.
David Madden of CMC Markets commented on the report:
‘The drug in question has been tipped as a potential treatment for the coronavirus for several months, and the findings from the latest study boosted market sentiment.’
As a result, the risk-sensitive INR has benefited from hopes that the global economy could effectively be fast-tracked towards recovery if the vaccine is successful.
However, following reports over the weekend that India’s Covid-19 cases had passed 800,000 and growing has left many investors concerned for the nation’s economy.
Pound (GBP) Sinks as Brexit Woes Return
The Pound (GBP) struggled today on growing concerns over the lack of progress in UK-EU trade talk. This follows reports from the Institute of Directors (IoD) that three in four UK firms are unprepared for Brexit.
Jonathan Geldart, director-general of the IoD, commented on the report:
‘With so much going on, many directors feel that preparing for Brexit proper is like trying to hit a moving target. Jumping immediately into whatever comes next would be a nightmare for many businesses.’
Meanwhile, UK consumer continue to shun high streets with the data Springboard showing that footfall had fallen by a whopping 65% in June. As a result, investors are becoming increasingly concerned about the British economy.
Diane Wehrle, insights director at Springboard, commented:
‘This is concerning for the economic recovery path of bricks-and-mortar retail who are heavily reliant on customer experience.’
GBP investors are also awaiting Prime Minister Boris Johnson’s official announcement on whether face masks should be worn in shops throughout England. Any signs that this rule could be enforced could weaken Sterling as investors become concerned over the effect on the retail sector.
In UK economic news, today will see the release of the BRC Like-for-Like Retail Sales report for June. Any improvement in the gauge could prove GBP-positive.
GBP/INR Outlook: Could Brexit Hopes Boost the Pound?
Pound (GBP) traders will be looking ahead to tomorrow’s release of May’s UK Manufacturing Production figure. If this remains lodged in the doldrums, we could see the GBP/INR exchange rate fall.
Tomorrow will also see the release of the UK’s GDP figure for May. If this confirms forecasts and rises by 5%, then we could see Sterling rise.
Indian Rupee (INR) investors will be awaiting tomorrow’s release of the WPI Inflation indicator for May. Any signs of this remaining in negative territory would prove INR-negative.
The GBP/INR exchange rate will remain sensitive to Brexit developments this week. If the UK and EU begin to compromise on a trade deal, we could see Sterling soar.