- Indian Rupee (INR) edged lower after dovish move by RBI
- Domestic equities offer support as metal prices rise
- Pound (GBP) trades cautiously ahead of BoE rate announcement
- BoE could sound more upbeat
The Pound Indian Rupee (GBP/INR) exchange rate advancing, for a second straight session. The pair settled +0.18% on Wednesday at 102.65. At 08:45 UTC, GBP/INR trades +0.05% at 102.69.
The Pound is trading cautiously ahead of the Scottish elections and the Bank of England monetary policy announcement.
The Scottish elections are of interest to the Pound because a clear majority by the Scottish Nationalist Party could see a revival in demands for a new Scottish Independence referendum. This is a minor risk, but one that Pound investors will monitor all the same.
Pound investors are expected to be much more focused on the Bank of England’s monetary policy announcement. The BoE is expected to hold steady on monetary policy, keeping interest rates at 0.1% and the asset purchase programme at £895 billion.
The UK economy is in a much better place than it was at the start of the year owing to the vaccine rollout and easing lockdown restrictions. Therefore, investors will be keen to see if the BoE adopts a more upbeat tone regarding the outlook for the economy.
The Reserve Bank of India announced new measures to provide liquidity to key sectors as India steps up its fight against covid. The central bank will provide $6.8 billion in liquidity aimed mainly at small businesses to help them through the second covid wave which is ravaging the country at the moment.
The covid wave is expected to worsen still before starting to taper off later this month, according to experts. Pressure has been mounting on Prime Minister Narendra Modi to impose tight lockdown conditions to stem the spread of covid. So far, the PM has resisted a countrywide tight lockdown in order to avoid the economic hit which comes with it.
The Rupee is seeing some support from the rise in the equity markets. The Sensex trades higher thanks to commodity stocks as metal prices rally.