GBP/INR continues the downbeat tone for the third session in a row, even though the pound is slightly up against the USD and euro. This denotes that the rupee is somewhat bullish in early trading on Friday, which is hard to explain given that India saw another record spike in coronavirus cases yesterday and many regions and cities are returning to strict lockdown measures that will hinder the economic recovery.
At the time of writing, one British pound buys 94.262 Indian rupees, down 0.02% as of 7:00 AM UTC. The price couldn’t consolidate above 95.000 on Wednesday and has declined since then.
Yesterday, the Office for National Statistics (ONS) released some upbeat labour market data, but economists warn that this is just a temporary relief before the real picture gets in.
Indian Companies Fear of Second Wave
In India, companies expressed worries about further disruption from the worsening pandemic, which might see a second wave. The International SOS conducted a survey titled “Return to Work,” finding out that 70% of local businesses consider a potential new wave of COVID as the top threat for their operations.
International SOS executive Rahul Kalia commented:
“The current pandemic not only compels us to safeguard from the virus but at the same time poses many other health and security challenges for employees and businesses.”
The pace of the outbreak continues to increase in India. Local states and cities are re-imposing restrictive measures, sometimes with little warning, which worries central authorities. Now the issue is debated by government officials as the fragile recovery observed at the beginning of June is losing momentum.
More positively, India’s health ministry revealed that the national COVID fatality rate is 2.6% and declining. The deaths per million population figure is also among the lowest in the world.
Despite the economic damage, the rupee could secure some gains against the pound as the interest in riskier assets has increased on hopes for effective COVID vaccines. US biotech firm Moderna presented some promising results at the beginning of the week. Now it’s ready to advance to the next testing phase to trial the vaccine on 30,000 volunteers.
