GBP/INR is about to end the week lower. Yesterday, the price touched the lowest level since April 7, at 93.021. Currently, one British pound buys 93.479 Indian rupees, down 0.21% as of 6:20.
On Thursday, the pair was quite volatile. It was bearish in the first hours of the session, and suddenly bounced back after the Bank of England left the interest rates unchanged. Nevertheless, after investors assessed the central bank’s statement and outlook more in detail, the price dropped to the lowest level in a month.
The next reliable support is at 92.800, which is the lowest since April 6.
UK Consumer Confidence Fell Short of Expectations
The pound couldn’t recover most of yesterday’s losses as polling firm GfK said that the British consumer confidence had maintained close to the lowest level on record, even though it inched up. The index, which comes out every two weeks, increased to -33 in the period between April 20 and 26 from -34 during the first part of the month. Analysts hoped for a more evident recovery, as they expected an increase to -15.
The lowest reading was recorded during the financial crisis 2008 when the index tumbled to -39.
GfK’s client strategy director Joe Staton commented:
“Consumer confidence in Britain’s lockdown economy is still severely depressed. However, we are recording small improvements in our personal finances and the wider economic picture for the next 12 months, key indicators when gauging optimism for our path to recovery.”
GfK reported a three-point increase in its Major Purchase sub-index, suggesting recovering demand. However, the Savings Index dropped by nine points.
Yesterday, the Bank of England warned that the UK might experience the worst economic recession in over three centuries due to the COVID-19 pandemic and the lockdown measures. While the central bank maintained the interest unchanged, it is ready to extend the stimulus program next month if needed.
As for the Indian economy, it is also struggling with the massive impact caused by the social distancing measures and lower foreign demand. Earlier Friday, Moody’s Investors Service maintained the country’s Baa2 rating, saying that the negative outlook points to increasing risks that the economy would keep much lower than in the past.
