GBP/INR finally broke below 95.000 after bears tested the support for several occasions since last week. Currently, one British pound buys 94.525 Indian rupees, down 0.10% as of 6:10 AM UTC. The next reliable support level is at 94.000. The pair touched a daily low at 94.272, but it suddenly bounced back after the UK released a series of economic data a few minutes ago. The price will likely flash green by the end of the session since the current intraday uptrend is getting traction very rapidly.
Just recently, the Office for National Statistics published several inflation indicators and their variations. Most of the indicators beat analysts’ expectations, which helped the pound recover some of the previous losses against the rupee and majors.
The growth of the consumer price index (CPI) slowed last month to 1.5% year-on-year from February’s 1.7%, in line with analysts’ forecasts. Core CPI slowed in March to 1.6% from 1.7%, also in line with expectations.
The decline in the price of fuel and clothing has driven the change in UK inflation.
The ONS said that the indicator was “likely” to have been impacted by the COVID pandemic.
“Consumer behaviours and retailers’ expectations of that behaviour might have changed as a result of social distancing and other precautions,” the agency noted.
Output PPI Was Surprisingly Positive
The output gauge of the producers price index (PPI) was 0.3% on the year to March, down from February’s 0.5%. Economists expected a decline to -0.1%.
The ONS said that the price for materials and fuels used in manufacturing (input PPI) showed negative growth of 2.9% in March year-on-year, down from negative growth of 0.2% in the previous month. In monthly terms, the input PPI declined to -3.6%, which is still better than expected.
Petroleum products had the largest downward contribution to the change in the rate of output inflation, while crude oil had the largest downward contribution to the decline in the input inflation.
The Bank of England expects that inflation will drop below 1% in the coming months due to the coronavirus crisis. Policymaker Silvana Tenreyro stated last week that it would be difficult to interpret CPI data as price collection is more difficult under these conditions. The central bank’s target is 2%.
