GBP/INR continues the bearish stance on Wednesday. At the time of writing, one British pound buys 97.573 Indian rupees, down 0.11% as of 6:30 AM UTC. The price has formed a double top pattern at the end of August with the resistance near 98.300. Usually, this is a bearish pattern, and it might suggest that the pair is about to break below 97.000 again soon, though the fundamentals are not supporting the rupee at all. Recently, India reported a record GDP contraction in the first quarter of the fiscal year 2021.
The pound is declining despite upbeat housing market data. Earlier today, mortgage lender Nationwide reported that British house prices surged to an all-time high last month. The UK housing market is experiencing a V-shaped recovery after the coronavirus lockdown. As per Nationwide, house prices leapt 2.0% from July, the biggest monthly increase in 16 years. Analysts polled by Reuters expected an increase of 0.5%.
The report notes that prices rose 3.7% year-on-year, while economists expected a 2.0% increase.
The housing market has been boosted including by the incentive provided by British finance minister Rishi Sunak, who cut a tax for house purchases.
Yesterday, the Bank of England said that mortgage approvals had surprisingly rose in July, adding to the conclusion that the housing market is expanding at a fast pace right now. But Robert Gardner, Nationwide’s chief economist, said:
“However, most forecasters expect labour market conditions to weaken significantly in the quarters ahead as a result of the after-effects of the pandemic and as government support schemes wind down. If this comes to pass, it would likely dampen housing activity once again in the quarters ahead.”
UK Shop Prices Drop 1.6% in August
Separately, the British Retail Consortium (BRC) said that UK retailers had discounted their products more aggressively last month to attract buyers after the lockdown. Shop prices dropped 1.6% in August, after a decline of 1.3% in July. The August drop was driven by a 3.4% decline in non-food prices.
BRC chief executive Helen Dickinson explained:
“Many retailers have continued to run promotions and sales in order to entice customers to spend and make up for lost ground during lockdown.”