- One British pound buys 93.133 Indian rupees, down 0.05% as of 6:44 AM UTC.
- Rupee has been under pressure amid declining sentiment around the Sino-US trade deal
- On Monday, Nirmala Sitharaman said that the Indian economy was still the fastest growing economy among G20 nations despite the slowdown
GBP/INR is trading lower on Tuesday morning, taking a break from the recent rally. The pair surged since last Friday on increasing Brexit optimism, while sentiment around the US-China trade relationship faded a bit.
One British pound buys 93.133 Indian rupees, down 0.05% as of 6:44 AM UTC.
US-China Pessimism is Back
However, the pound is still in a better position these days as it had surged since last Friday. The rupee has been under pressure amid declining sentiment around the Sino-US trade deal. The markets expected the world’s two biggest economies to sign a “phase one” trade deal. But it seems the Chinese negotiators are reluctant given that US President Donald Trump doesn’t want to roll back tariffs. Yesterday, a Chinese official told CNBC that Beijing was concerned about Trump’s position. Also that there were still many issues between the two sides.
Nevertheless, some onlookers are still optimistic about the potential agreement. John Studzinski, managing director of bond investment firm Pimco, commented:
“There are obviously issues remaining about agricultural purchase targets, forced technology (transfer) and broader enforcement issues. But I think the view would be to try to resolve something by the beginning of December and sign it before Christmas.’
The executive said that Trump knew how important it was to bring stabilization, especially when he had gotten a lot of endorsement from US CEOs.
On Sunday, Chinese state media agency Xinhua reported that Chinese Vice Premier Liu He had a phone call with US Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer. The Saturday discussion between officials touched upon the “phase-one” trade deal, though no further details were revealed.
India Still Fastest-Growing G20 Economy
The rupee might have found some support in Indian Finance Minister’s recent comments. On Monday, Nirmala Sitharaman said that the Indian economy was still the fastest growing economy among G20 nations despite the slowdown. She added that the International Monetary Fund (IMF) projected India to be the fastest growing G20 economy next year as well. According to Sitharaman, the government was taking multiple measures to revive the economy. She said:
“The government has been taking several measures to address moderate levels of fixed investment rate in the economy, plateauing of private consumption rate and a modest export performance, with a view to increasing the GDP (gross domestic product) growth.”