GBP/INR has returned to growth, though it’s still trading below 95.000. Currently, one British pound buys 94.672 Indian rupees, up 0.19% as of 6:25 AM UTC. The pair has been moving sidways since last Friday, after several bearish sessions. Now it seems that the price is experiencing a trend reversal and the pound will try to leverage the lockdown easing rhetoric to consolidate above 95.000.
The British currency has become more confident after IHS Markit released the preliminary readings of the purchasing managers index (PMI) for the manufacturing, services, and construction sectors. Data shows that the economy is reviving as the restrictive measures are gradually lifted.
The composite PMI, which merges the services and manufacturing sectors, surged to 47.6 in June, from 30.0 in May. This was a record increase that beat analysts’ expectations for a rise to 41.
IHS Markit economist Chris Williamson commented:
“June’s PMI data add to signs that the economy looks likely to return to growth in the third quarter, especially given the further planned easing of the lockdown from 4th July.”
UK Pubs, Restaurants, Hotels to Reopen Early Next Month
Yesterday, UK Prime Minister Boris Johnson said that restaurants, pubs, and hotels might reopen on July 4 when the two-metre social distancing rule is relaxed. He noted that the infections rate of COVID-19 is declining and the risks of a second wave were low. The PM told the parliament:
“Today we can say that our long, national hibernation is beginning to come to an end. All hospitality indoors will be limited to table service, and our guidance will encourage minimal staff and customer contact.”
As for the dominant services sector, the PMI reading rose to 47 from 29 in May – a record surge that points to a “decisive shift in momentum.” Economists polled by Reuters anticipated an increase to 40.
Still, Williamson said that the longer-term recovery prospects remained uncertain. The economy is likely to be dragged down by weak demand for many goods and uncertainty over job prospects.
The manufacturing PMI rose to 50.1 in June from 40.7 in May, leaving the contraction territory. The 50 mark separates growth from contraction.