inr-bank-notes - INR
  • Indian Rupee (INR) is treading water after 1.6% decline on Monday
  • Covid concerns remain elevated
  • Pound (GBP) supported by signs of recovery in jobs market
  • UK CPI data due tomorrow

The Pound Indian Rupee (GBP/INR) exchange rate is consolidating after a strong rally in the previous session. The pair settled 1.64% higher on Monday at 104.66 towards the high of the week. At 07:45 UTC, GBP/INR trades -0.1% at 104.57

The Indian Rupee traced domestic equities lower as demand for Indian assets tumbled on Monday. With covid cases surging to record levels day after day and tighter lockdown restrictions being imposed, the economy is unlikely to escape unscathed.

The capital, New Delhi was placed into lockdown in on Monday for six days. This comes after the richest state and home to Mumbai, Maharashtra also locked down amid soaring covid cases.

India will now allow anyone over the age of 18 to have the covid vaccine in an attempt to stem the spread of the virus.

The Sensex closed -1.8% in the previous session, whilst the Nifty 50 closed 1.7% lower. Domestic equities are attempting a rebound today.

Rising oil prices have added to the Rupee’s woes. Oil surged over 6% across the previous week and is extending those gains this week adding another 1.4% so far.

The Pound is trading broadly higher versus its major peers after data revealed that the UK jobs data is holding up better than anticipated. Britain’s unemployment rate unexpectedly fell for a second consecutive month, ticking below 5% to 4.9% in the three months to February. The number of employees also fell by 56,000. However, with businesses looking to wards reopening, the number of job vacancies also rise in March suggesting that the worst has passed.

Looking ahead, there is no further UK economic data today. Instead investors will look towards UK inflation data tomorrow, as measured by the consumer price index (CPI). Analysts are expecting the rate of inflation to rise on both a monthly and annual basis.