- Pound (GBP) rebounds after weak inflation data
- BoE Andrew Bailey due to speak
- Indian Rupee (INR) rises despite surging covid cases & equities falling
- WTI rebounds 4%
The Pound Indian Rupee (GBP/INR) exchange rate is attempting to claw higher, snapping a 5 session losing streak. The pair settled -0.40% lower on Wednesday at 99.37 towards the low of the day. At 08:45 UTC, GBP/INR trades +0.1% at 99.41.
Disappointing UK inflation data overshadowed better than expected PMI figures and sent the Pound tanking lower on Wednesday.
UK inflation increased 0.1% in February month on month, following a -0.2% decline in January. However, it was significantly less that the 0.5% forecast. On an annual basis, consumer prices rose just 0.4%, down from a 0.7% rise in January and 50% below the 0.8% expected. The weak reading came as clothing was heavily discounted, dragging the Pound lower.
Better than forecast PMI data failed to lift the Pound out of negative territory on Wednesday. Data from IHS/Markit showed that UK business activity jumped in March, lifted by stronger consumer confidence ahead of the UK economy reopening.
The initial reading for the composite PMI spiked to 56.6 in March, up from 49.6 last month. The level 50 separates expansion from contraction.
Today the UK economic calendar is quiet. Bank of England Governor Andrew Bailey is due to speak which could drive movement in the Pound.
The Rupee strengthened despite concerns over rising covid cases in India. A second wave appears to be spreading across the country, with the highest number of covid cases bring reported in 4 months.
Fears over the impact that another lockdown could have on the Indian economic recovery dragged on demand for Indian equities. The Sensex and the Nifty 50 both ended almost 2% lower, with financials under the most pressure.
Oil prices also jumped sharply as the rollercoaster week for oil continues. West Texas Intermediate tanked 6% on Tuesday on covid inspired demand fears. WTI crude then jumped 4% in the previous session, support by the blockage in the Suez Canal.