- Indian Rupee (INR) gained over the previous week
- Modi’ ruling party loses key election
- Pound (GBP) weighs up political nerves against reopening optimism
- Domestic UK politics & BoE in focus this week
The Pound Indian Rupee (GBP/INR) exchange rate is holding steady as the new week kicks off after strong losses across the previous week. The pair lost -1.5% across last week settling on Friday at 102.32.
The Pound traded relatively quietly in the previous week versus it’s major peers. Reopening optimism underpinned the Pound, whilst domestic political concerns surrounding Northern Ireland and Scottish Independence weighed on demand for Sterling.
The UK reported 1671 new daily covid infections on Sunday. Meanwhile, 34.51 million people had had received the first dose of the covid vaccine.
Today is a public holiday in the UK, so trading volumes are expected to be low and movement muted. Furthermore, there is no high impacting data due to be released. However, there are still plenty of unfavourable headlines surrounding Prime Minister Boris Johnson which could start to dampen demand towards Sterling.
This week is a big week for the Pound with two key risk events. Firstly, the Bank of England monetary policy announcement and secondly the election in Scotland, which could put the independence question back firmly on the table.
The Indian Rupee strengthened across last week as domestic equities advanced on upbeat earning. However, the covid crisis deepened and remains a very high risk.
With covid cases soaring, an industry body urged Indian authorities to take strong national steps to limit the spread of covid. The body recommended curtailing economic activity in order to save lives as the resurgence of covid overwhelms the healthcare system.
Authorities reported just shy of 400,000 new daily covid cases over the past 24 hours.
Separately Prime Minister Modi’s ruling party was defeated in a key state election which was help even as cod cases hit new record levels. Modi has been critised for focusing on the election over covid.