- Indian Rupee (INR) extends losses as covid cases top 180,000
- Maharashtra goes into lockdown
- Pound (GBP) lifted as UK economy rebounds in February
- UK GDP +0.4% MoM in February
The Pound Indian Rupee (GBP/INR) exchange rate continues its rally. The pair settled +0.5% higher in the previous session at 103.46 a level last seen in 2014 and close to the all time high. At 07:45 UTC, GBP/INR trades +0.67% at 103.70.
The Indian Rupee has come under pressure as India’s richest state, Maharashtra, the new centre of the covid resurgence, has announced a 15-day lockdown. The measure will implemented in an effort to bring covid cases under control.
Maharashtra is home to India’s financial capital Mumbai and is also the country’s most industrialised state. Concerns are rising over the impact that a new lockdown restrictions will have on the Indian economic recovery.
India reported 184,372 new covid cases on Wednesday a new record high taking the total infections to 13.9 million.
Highlighting concerns over the outlook investment bank JP Morgan recommended selling emerging market currency in a complete 180 degree turn from their position at the start of the year.
The Pound traded broadly lower versus its major peers in the previous session after data revealed that the UK economy grew at a slower pace than expected. Britain’s economy expanded 0.4% month on month in February. This represents a solid rebound from a -2.2% contraction in January. However, it was short of the 0.6% growth that analysts had penciled in.
The UK economy managed to return to growth despite in February, despite tough lockdown restrictions imposed across the first three months of the year. However, with the economy firmly along the path to reopening economic growthy is expected to pick up from here onwards.
There is no high impacting UK data due to be released today, so sentiment is likely to drive the Pound. Also Bank of England’s Haskel is due to speak and could offer some clues over how the central bank sees policy going from here.