- Pound (GBP) underpinned by reopening optimism
- UK Manufacturing PMI in focus
- Indian Rupee (INR) strengthens in risk on trade
- Indian manufacturing PMI February 57.5 vs 57.7
The Pound Indian Rupee (GBP/INR) exchange rate is. The pair surged 1.3% higher across the previous week closing on Friday at 102.98. The pair rallied a solid 3.2% across the month of February in its strongest monthly performance since July last year. At 08:45 UTC, GBP/INR trades -0.7% at 102.29.
The rapid vaccine rollout programme in the UK is underpinning Pound strength. The number of covid vaccine first doses reached 20 million over the weekend just days after the Prime Minister Boris Johnson set out the path to releasing lockdown restrictions and reopening the economy.
The prospect of the UK being one of the first countries to reopen its economy is providing support to the currency.
There isn’t much in the way of UK economic data this week meaning that covid and sentiment will be particularly in focus ahead of the Chancellor Rishi Sunak’s UK 2021 Spring Budget which will be delivered on Wednesday.
Given the fragile state of the economic recovery and the UK labour market, Rishi Sunak is expected to announce fresh stimulus to help support the economy in what will hopefully be the final stages of the pandemic.
Today investors could look towards the release of UK manufacturing PMI for February. Analysts expect the PMI to climb to 54.9 up from 54.1. The level 50 separates expansion from contraction.
Indian manufacturing PMI for February falls marginally to 57.7 down from 57.7 a month earlier. However, it remains above the long running average. News orders expanded sharply. However the employment subcomponent decreased further owing to the pandemic
The data comes following Indian GDP reading for the October – December quarter which was released on Friday. The data revealed that the Indian economy returned to growth emerging from a pandemic inspired recession.
The Indian economy grew 0.4% in the December quarter following -7.3% contraction in the September quarter. According to the National Statistics Office the Indian GDP is expected to contract 8% in FY2020-21, more than the -7.7% forecast previously. This suggests that the rebound in the March quarter has been weaker than what the NSO expected.
Looking ahead investors are expected to watch the balance of trade release at 12:30 UTC.