GBP/INR continues to increase on Wednesday, after gaining 0.47% yesterday. The pair is now trading at 92.941, up 0.09 as of 6:50 AM UTC.
The pound surged yesterday after the UK’s Office for National Statistics (ONS) said that job growth was the strongest in more than a year. In the three months to November, the number of employed people increased by 208,000 to 32.90 million, while analysts expected an increase of 110,000. Also, the number of those out of work fell by 7,000 to 1.31 million, while the unemployment rate was steady at 3.8%, which is the lowest level since 1975.
The ONS data is relevant because two out of nine members of Bank of England’s Monetary Policy Committee (MPC) voted for a rate cut last year, citing specifically weakness in the labor market. Earlier this month, three other policymakers, including Governor Mark Carney, expressed their readiness to support more stimulus. The BoE should meet on January 30, and it is still unclear whether it will back the first rate cut since 2016.
Signs of weakness in job creation prompted two BoE rate-setters to vote for lower borrowing costs at the end of last year. Three others, including Governor Mark Carney, have said recently that more economic stimulus might be needed.
The sterling’s rally is hindered by fears of Brexit uncertainty, especially after the UK Parliament’s House of Lords made the fourth amendment to Prime Minister Boris Johnson’s Withdrawal Agreement Bill (WAB). Johnson has a majority in the House of Common – the lower house of the parliament, but his party doesn’t have full control over the House of Lords.
As for the Indian rupee, it is still under pressure amid the country’s economic struggles. Besides, fears of the new and mysterious virus in China persist. The coronavirus has killed the sixth person in China. Hundreds of millions of Chinese will travel for the Lunar New Year holiday, which might boost the infection rate.
A World Health Organization (WHO) official confirmed that the virus can be transmitted from human to human.