GBP/INR continues the bullish stance after losing ground at the end of the Monday session. At the time of writing, one British pound buys 98.392 Indian rupees, up 0.47% as of 6:30 AM UTC. The price is facing resistance near 98.400. If it breaks above it, it might continue until 98.800 to update the highest level in four years.
The pound leverages the cautious optimism around the post-Brexit deal between the UK and the European Union.
Britain still hopes that a deal with the EU might be achieved next month during the latest round of negotiations, Prime Minister Boris Johnson’s spokesperson said yesterday.
“Our assessment is that a deal can still be reached in September,” he said.
He added that UK negotiations would “continue to plug the gaps” as talks start next Tuesday in Brussels for their seventh round.
However, Britain and the EU still cannot reach consensus over fishing rights, competitions rules, and how the post-Brexit deal would be enforced. Johnson ruled out any possibility to extend the deadline after December.
Indian Economy Gradually Reviving
Meanwhile, the Indian economy is gradually reviving, though the fundamentals are not helping the rupee so much as of now. Brokerage giant Nomura said yesterday that the Indian economy had experienced an increasing pace of recovery through August. The Nomura India Business Resumption Index (NIBRI) rose to 73.7 in the week ending August 16, up from the previous week’s reading of 72.3. The index moved sideways for most of July. However, Nomura said:
“Nevertheless, the recovery is uneven, and the risk of reversal in momentum from a second wave of COVID-19 cases joining a ‘rolling wave’ in traditional safer states (in the south and the east) remains high.”
Elsewhere, the State Bank of India (SBI) said in its research report Ecowrap that the country’s gross domestic product (GDP) would contract by 16.5% in the first quarter of the current fiscal year. In May, SBI anticipated a 20% contraction for the same period. The current research report forecasts a better figure, “though with the relevant caveats in the current uncertain scenario.”
