The British pound is strengthening its position against the Indian rupee in early trading on Monday. GBP/INR has seen several ups and downs since the start of the month but now the pair is determined to rally.
Currently, GBP/INR is trading at 91.576, up 0.44% as of 6:59 AM UTC.
Markets will closely watch UK data to be released later today, including the GDP, businesses investment, and trade balance.
The rupee is losing strength amid investors’ disappointments in the Sino-US trade negotiations. Last Friday, US President Donald Trump denied Beijing reports saying that the two countries would start rolling back tariffs as part of a “phase one” trade agreement. Nevertheless, Trump admitted he expects to ink a deal with his Chinese counterpart on the US territory.
PM Modi’s Party Loses Maharashtra
The rupee is also under pressure from the news at home. Prime Minister Narendra Modi’s ruling party has lost power in Maharashtra, India’s richest state, after hesitating to form government. Modi’s Bharatiya Janata Party (BJP) won election in Maharashtra last month and was expected to maintain power in tandem with its regional ally – the Shiv Sena. However, inside clashes between the two parties led to a change for Modi’s regime, in which allies are forming a government with the opposition – a major blow for Modi.
A senior official of the Shiv Sena party stated on Monday:
“We have required numbers to form the government and we will prove it.”
Shiv Sena’s Arvind Sawant, the federal Minister of Heavy Industries and Public Enterprises, also left the Modi government.
UK Labor Market Experiences Slight Relief
Elsewhere, the pound looks more confident as the UK employers’ hiring plans have increased from an 18-month low. Earlier today, the Chartered Institute of Personnel and Development (CIPD) said that the quarterly net employment balance increased to +22 from +18.
CIPD economist Jon Boys stated:
“Despite the political uncertainty, employers have held their nerve and adopted a ‘business as usual’ approach to their hiring needs.”
The indicator eases concerns of a weakening labor market that caused two policymakers at the Bank of England vote for an interest rate cut.
However, the optimism is limited as official data has previously pointed to a decline in the number of employed, while economists anticipated Q3 data to show the biggest drop in eight years.