- Indian Rupee (INR) rebounds higher
- Domestic equities rally on upbeat earnings
- Pound (GBP) weighs up Brexit nerves and reopening optimism
- Brexit concerns surrounding Northern Ireland & Scotland
The Pound Indian Rupee (GBP/INR) exchange rate is declining on Thursday, paring gains from the previous session. The pair settled +0.2% on Wednesday at 103.95 towards the high of the day. At 16:45 UTC, GBP/INR trades -0.55% at 103.38.
The Rupee strengthened versus the Pound and the US Dollar on Thursday despite the covid crisis in in India escalating. India reached another grim milestone, recording 18 million covid cases. There was a record 379,257 new daily infections tallied over the past 24 hours.
Instead, the Rupee is tracing the domestic equity market higher. Indian shares rallied for a fourth consecutive day advancing to the highest level since in six weeks thanks to upbeat corporate earnings reports.
Reliance Industries, India’s largest company by market value also rose by 2.4% on M&A chatter involving Saudi Aramco. THE Nifty 50 closed 1.1% higher and the Sensex settled up 1.19%.
This week has been a quiet week on the UK economic calendar leaving Pound investors to look towards other drivers.
Reopening optimism is underpinning the Pound, on the one hand. However, political tensions within Britain are also dragging on demand for sterling.
The UK continues to see covid cases and deaths fall. Meanwhile there have been almost 34 million first dose vaccines administered. England’s Deputy Chief Medical Officer believes that progress with the covid vaccine programme should limit the impact of any third wave of covid.
Meanwhile concerns over political tensions in Scotland and Northern Ireland are rising hurting demand for the Pound.
Northern Ireland First Minister Arlene Forster is to step down. Pressure within her party has pushed her to resign with many unhappy over how she handled Brexit and social issues. Northern Ireland has seen significant unrest since Brexit.
Scottish independence is very much back on the agenda. Morgan Stanley sees a 15% chance of Scottish Independence from the UK whilst Citi see it closer to 35%. Scotland will hold elections next week. The issue of independence will be center stage after Scotland wanted to remain within Europe.