- Indian Rupee (INR) slumps on lockdown concerns
- Covid cases remain elevated & vaccinations low
- Pound (GBP) underpinned by BoE move & election results
- UK GDP Q1 due on Wednesday
The Pound Indian Rupee (GBP/INR) exchange rate is rising at the start of the new week, after a relative flat performance in the previous week. The pair closed on Friday at 102.34, the same level that it had started he previous week at. At 08:45 UTC, GBP/INR trades +0.9% at 103.27.
The Pound was underpinned last week by the BoE monetary policy decision. The BoE also upwardly revised the UK economic growth outlook with growth of 7.25% now expected in the UK this year. The upward revision comes thanks to the quick vaccine rollout, extended furlough scheme and the on track economic reopening.
The Pound is also finding support from the local elections at the end of last week. Results over the week showed that the ruling Conservative party performed well. In Scotland the pro-independence Scottish Nationalist Party fell short of a majority by 1 seat.
Looking ahead the central focus for the Pound this week will be the first quarter UK GDP reading for. Expectations are for a -1.4% contraction in Q1. This would be significantly better than the -4% contraction initially forecast by the UK central bank.
The Indian Rupee has come under pressure as the covid crisis in the country remains in focus. The number of new daily infections fell below 400,000 to 366,161 on Monday.
As the health system collapses under the strain pressure is mounting on Prime Minister Narendra Modi to announce a nationwide lockdown, like the one imposed in the first covid wave in March last year.
Many states have imposed their own lockdown measures or places restrictions on movement and opening hours. However, a countrywide approach has been lacking.
The vaccination effort is also struggling. By Sunday just 34.5 million Indians had been fully vaccinated. This accounts for just 2.5% of the 1.35 billion population.