GBP/INR Continues Bearish Stance Ahead of UK GDP Data

• Pound reacts to lower than expected spending data
• Rupee strengthens on hopes coronavirus can be handled

GBP/INR continues the bearish stance on Tuesday morning, after moving sideways for several hours. Currently, the pair is trading at 91.906, down 0.15% as of 6:15 AM UTC. The rate is about to update the lowest level since January 14, after doing so yesterday. The sterling has the chance to take control over the pair after the UK releases gross domestic product (GDP) data later today.

Pound reacts to lower than expected spending data

Until then, the pound is reacting to retail spending data for January provided by the British Retail Consortium (BRC), which said that Britons were not as eager as expected when it comes to spending. Earlier today, the BRC said that retail spending rose 0.4% last month year-on-year.

Paul Martin, a partner at professional services firm KPMG, commented:

“Although static sales might not appear triumphant, at least it is no further deterioration. Consumer confidence has started to return post-general election, but we have not experienced any major leaps for the sector yet.”

On a side note, KPMG co-produces the retail spending survey with BRC.

The confidence across various markets came back after UK Prime Minister Boris Johnson won a major victory in the national election held on December 12.

Separately, Barclaycard, whose spending survey touches upon more categories of spending, showed an annual increase of 3.9% in spending by consumers last month. The indicator was driven by spending at supermarkets and on fuel. Elsewhere, spending at cinemas surged 22%, boosted by the release of epic war film “1917.” Airlines and travel agents also noted sales rise.

Barclaycard data showed that consumer confidence in the UK rose to 42%, which is the highest level since September 2016.

The poll comprised over 2,000 people and was carried out between January 24 and January 27 by Longitude Research.

Rupee strengthens on hopes coronavirus can be handled

As for the Indian rupee, the currency has strengthened along with other Asian currencies on hopes that the coronavirus outbreak in China can be handled. Several businesses, including Foxconn, Tesla, and Samsung Electronics, restarted production at their facilities in mainland China.

In the longer-term, the rupee will continue to be under pressure amid India’s economic slowdown.

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