GBP/INR Increases Amid Low Volatility on Christmas Day

GBP/INR is advancing in early trading on Wednesday, eyeing to reverse the downtrend that wiped out the sterling’s gains secured during the UK national election. However, the pair is quite volatile amid very low volumes, as the UK markets are closed on Christmas Day.

Currently, one British pound buys 92.522 rupees, up 0.23% as of 7:33 AM UTC. Nevertheless, it is still not clear where the quotation is heading to. A few minutes ago, the price displayed a 0.9% decline following a similar gain moments before that. The pair seems to form a slow uptrend that started late on Monday, though this might be another rebound inside the swing bearish channel.

The pound has declined dramatically after UK Prime Minister Boris Johnson expressed his intention to stop any attempt to extend the Brexit transition period beyond December 2020 deadline. Investors are worried that the tight timeline might end up in a no-deal Brexit, which might be devastating for the British economy.

Nevertheless, the pound’s drop against rupee has been more moderate than the steep declines against majors, including USD and euro. Thus, the GBP/INR pair is trading at relatively similar levels right before the UK election.

The rupee has been supported by increasing optimism over the US and China trade relationship. The two countries have finally agreed to sign an interim deal that will see the US cutting a series of tariffs on goods imported from China. Elsewhere, Beijing promised to buy US agricultural products, among others.

Besides this, China said on Monday that it would cut tariffs on over 850 products imported from the US and other trading partners, including Australia, South Korea, Iceland, New Zealand and Pakistan.

China’s Finance Ministry said that the move was meant to “increase imports of products facing a relative domestic shortage, or foreign specialty goods for everyday consumption.” Some of the products that will benefit from the tax reduction include frozen pork, semiconductors, pharmaceuticals, and avocados.

The rupee couldn’t extend its gains against the pound as the Indian economy has been struggling with the worst slowdown in over six years.

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