- Indian Rupee (INR) rises despite the covid tally passing another grim milestone
- HSBC cuts India’s GDP forecast owing to covid restrictions
- Pound (GBP) trades mixed versus majors
- CPI rises +0.7% YoY vs 0.8% forecast
The Pound Indian Rupee (GBP/INR) exchange rate is heading lower on Thursday after gaining for most of the week. The pair settled approximately flat on Wednesday at 105.03 ending a three day winning run. At 07:45 UTC, GBP/INR trades -0.6% at 104.34
Today the UK economic calendar is light. The UK continues to push forward with its swift vaccine rollout which has helped the UK economy reopen. There are some concerns over the highly infectious Indian covid strain which has arrived in the UK.
Yesterday data revealed that UK inflation rebounded in March from February’s weakness, although it was still below analyst’s forecasts. Consumer price inflation rose 0.7% year on year, up from 0.4% in February. Analysts had pencilled in 0.8% increase. Rising transport and clothes prices lifted the index as business prepared to re-open.
Looking ahead UK retail sales data is likely to closely watched as the UK prepared for reopening.
Covid cases in India reached passed a new grim milestone on Thursday. India recorded the most new daily infections in the world of 314,8355, surpassing a record of 295,000 held by the US.
Two events in the country – state elections and the festival Kumbh Mela have meant millions of people have come together without social distancing spreading the virus.
Once the election are over in 5 states they can be expected to lockdown, further depressing economic activity.
With Indian economic activities increasingly affected by the surging covid storm more ratings agencies are downwardly revising growth forecasts for India.
Analysts at HSBC have grown more cautious about the outlook for India suggesting that year on year growth could fall into negative territory. Meanwhile quarter on quarter GDP in the three months to June is expected to contract.
HSBC expected March GDP to shrink -2.3% year on year against 0.4% growth in the previous quarter.