The Brexit trade talks are reaching their 24th hour, the UK is observing a rapid increase in coronavirus infections, but despite everything, the pound continues to recover against the Indian rupee. At the time of writing, one British pound buys 94.281 Indian rupees, up 0.40% as of 7:20 AM UTC.
The sterling is bullish against the rupee and the majors as investors are pricing in the cautious hopes ahead of the last round of Brexit talks. The main story making the headlines right now is that a no-deal divorce will be so damaging for Britain, especially amid the worsening pandemic, that it will accept compromises and would reach consensus with European leaders.
European chief negotiator, Michel Barnier, told ministers from member states that there was “a more open atmosphere at the negotiating table,” hinting to some optimism surrounding a potential deal. However, he added that “substantial differences of opinion remain, particularly on a level playing field.”
The deadline was initially set for the end of December, but UK Prime Minister Boris Johnson himself moved it to October 15, so time is running out. He even planned to introduce a new bill that would override the current agreement, prompting criticism from the EU and even from members of his own party.
England Might Experience Stricter Lockdown
Still, the sterling’s intra-day rally is capped by fears that the number of COVID infections continue to increase in the UK. A health ministry official said earlier today that the government was pondering more restrictions in England to address the break. Junior Health Minister Helen Whately told Sky News:
“We don’t want to bring on new restrictions but of course we keep a constant eye on what is going on with the COVID rate. We were looking at what we might be able to do.”
Elsewhere, the Times newspaper reported that ministers were about to announce a total social lockdown in northern England and London. If this will be the case, all pubs, bars, and restaurant will be required to shut down for two weeks.
As for India, the economy is set to experience a record contraction in the current fiscal year, which doesn’t bode well for the rupee.
