GBP/INR is advancing on Friday, after several days of high volatility but no clear direction. The pair is currently trading at 92.830, up 0.22% as of 6:16 AM UTC.
Yesterday, the rupee jumped on the news that India and the US were about to settle their trade issues. Both New Delhi and Washington are confident that the two economies would find an early solution, according to Raveesh Kumar, a spokesman for India’s foreign ministry. He said:
“Discussions have been going on between the two sides. We remain optimistic that a solution will be found very soon.”
India and the US have had trade issues for months, imposing tariffs on each other’s products.
A government official told media that India’s commerce minister Piyush Goyal visited the US on Wednesday to iron out differences. He met US Trade Representative Robert Lighthizer.
Nevertheless, the optimism about the US-India improved trade relationship couldn’t ensure major support for the rupee. The national currency is under pressure amid India’s economic slowdown.
Ratings firm ICRA recently cut its outlook for India’s gross domestic product (GDP) growth to 4.7% in the second quarter of the fiscal year 2020 that ended September. The economists cited weakening momentum in the industry.
The ICRA also reduced its gross value added forecast to 4.5% in the second quarter of the fiscal year 2020 from 4.9% in the previous quarter. The agency said:
“With subdued domestic demand, investment activity, and non-oil merchandise exports weighing upon volume expansion, manufacturing growth is expected to decelerate further from the marginal 0.6 per cent in Q1 of FY2020.”
In the UK, the sterling looks stronger as the Conservative Party, led by Prime Minister Boris Johnson, is doing well in opinion polls.