GBP / INR was bearish on Tuesday, but the pair managed to move away from weekly lows as the pound partially recovered thanks to cautious Brexit optimism. At the time of writing, one UK pound is buying 99.267 Indian rupees, down 0.40% at 8:30 AM UTC. Yesterday the price fell below 97,500 but then rebounded to close more than 1% higher.
The British pound has come under pressure as the UK reports a new strain of COVID which is around 70% more infected than the existing coronavirus. In addition, the pound sterling has been dragged down by the uncertainty of the ongoing Brexit negotiations as the UK and the EU have been unable to narrow the gaps in the fisheries sector. Still, some hopes for a trade deal surfaced yesterday when British Prime Minister Boris Johnson made a new proposal on EU fishing rights. The proposal says the UK is ready to allow European boats to keep two-thirds of their catch.
Prime Minister Boris Johnson said on Monday there were still problems in Brexit trade talks and Britain would prosper without a deal.
Meanwhile, Johnson also said the spreads had not been narrowed and that the UK would thrive without a deal. The PM said:
“The position is unchanged: there are problems. It is essential that everyone understands that the UK must be able to fully control its own laws and that we must also be able to control our own fisheries.
He said the WTO terms would be more than satisfactory for Britain and that the country could cope with any difficulties that “present themselves to us”. However, the UK has already experienced the biggest economic recession on record amid the pandemic. Many economists agree that a no-deal Brexit could make matters worse.
UK becomes isolated due to new strain of COVID
Britain is also struggling to contain a new strain of the COVID virus, called B.1.1.7. The government has already put in place a total lockdown in London and the south-east of England. Many European countries have closed their borders with the UK, while France has blocked all connections with Britain. The BBC reported that Britain and France could reach an agreement to reopen their border for freight by Tuesday.