- Indian Rupee (INR) extends gains
- Domestic equities rally on upbeat earnings
- Pound (GBP) under pressure as Brexit nerves overshadow reopening optimism
- Brexit concerns surrounding Northern Ireland continue
The Pound Indian Rupee (GBP/INR) exchange rate extends its move southwards on Wednesday. The pair settled -0.16% on Tuesday at 103.70 towards the low of the day. At 08:45 UTC, GBP/INR trades -0.4% at 103.31.
The Rupee continues to trace domestic equities higher. Indian shares rose for a third straight session on Wednesday hitting a three week high, boosted by financials and automaker stocks in the wake of strong quarterly earnings.
The Nifty 50 trades up 0.5% and the Sensex rallied 0.6% at the time of writing.
Separately, the S&P Global Ratings Agency said that the second wave of covid in India poses a downside risk to the economic recovery. The resurgence of covid and the corresponding lockdown restrictions heighten the possibility of disruptions to businesses, threatening the GDP.
Covid cases remain elevated in India with 323,144 new daily infections over the past 24 hours. International oxygen supplies are starting to arrive to India and a deal could be struck with the US for 60 million AstraZeneca vaccines.
Britain’s swift vaccine rollout and reopening of the UK economy is underpinning the Pound. 33.8 million people in Britain have now had their first vaccine dose. The number of covid cases has fallen an additional 17% over the past 7 days.
According to the British Retail Consortium, British retailers saw the steepest jump in sales since 2018 in April as non-essential shops re-opened following months of lockdown restrictions. The upbeat report added to indications that the British economy is rebounding solidly at the start of the second quarter.
However, investors are growing nervous ahead of the Brexit vote later today. The EU will take a final vote on the Brexit trade deal. Whilst MEP’s are ready to back the deal, the fact that it offers no solutions to the Northern Ireland issues makes the deal unimpressive. Talks surrounding Northern Ireland will continue over the coming weeks.