• GBP advances against major counterparts, including AUD and EUR
• Eurozone retail sales stronger than expected but support on EUR remains limited
• Rupee tumbles along with the equity market in India as COVID cases hit new record
Exchange rate between GBP and some of its major counterparts are gaining this morning, including AUD and EUR. GBPAUD currently trades around 1.8075 at press time, up about 0.34%; GBPEUR currently trades around 1.1545, up about 0.12%. UK has entered the second stage of its lockdown, with offline retailers, hairdressers, beauty treatments and outdoor hospitality re-opening under social distancing guidelines. As a result, business confidence among small businesses has been rising aggressively, according to the survey conducted by the Federation of Small Businesses. In Australia, RBA has confirmed the loose monetary policy last week, but unwanted news from vaccine rollouts creates worries among investors. Due to the potential blood clots, AstraZeneca vaccine will no longer be offered to those under 50 in Australia. This would potentially create delays in the vaccination schedule and has created some pressure on AUD as well.
Eurozone has some good news, but its support to the currency remains limited. In February, retail sales increased by 3.0% on a MoM basis, beating the consensus at 1.5%. According to Eurostat, volume of retail trade increased by 6.8% for nonfoods and 3.7% for automotive fuels. On the other hand, foods, drinks and tobacco fell by 1.1%. Among the member states, Austria (+28.2%), Slovenia (+16.4%), and Italy (+8.4%) have led the gains. Among major economies, France has witnessed a -1.2% and Germany +1.2%. Unimpressive data from major economies may be one of the reasons that this release has failed to transfer more support to EUR. Currently, EURUSD trades at 1.1889, down about 0.18%.
In India, the local currency plunged with stocks, amid worries that surging cases may worsen the economic contraction, which is already the worst in seven decades. INR has dropped significantly against USD, with USDINR reaches above 75 for the first time since August 2020. Currently, the pair trades around 75.353, up about 0.5%. On Sunday, India reported 168,912 new infections, totaling more than 13 million. India’s hospitals are running out of beds, yet immunization centers have been turning people away due to shortage of vaccine supply.