GBP/INR Extends Upward Trend Amid Low Trading Volumes  

GBP/INR is extending its uptrend that took off on December 23. Last Friday, it surged 0.87%. Currently, the pair is trading at 93.636, up 0.14% as of 7:18 AM UTC. 

The sterling is supported by hopes that UK Prime Minister Boris Johnson will change mind and extend the Brexit transition deadline beyond December 2020. For this, he will have to abandon a recent amendment that passed through the parliament. 

Recently, European trade commissioner Phil Hogan said that he expected Johnson to break his promise and extend the Brexit transition timeline. 

However, the PM was quite categorical in his speech before Christmas. He stated:

“There would be nothing more dangerous than extending the implementation period, in a torture that, as we all remember, came to resemble Lucy snatching away Charlie Brown’s football or Prometheus chained to the Tartarian crag, his liver pecked out by an eagle and then growing back, as honourable members on both sides of the house will recall, only to be pecked out again, with the cycle repeated forever.”

Johnson doesn’t like to break his promises, especially after being humiliated by the parliament when his Conservative Party didn’t hold the ruling majority. 

Elsewhere, the rupee is supported by optimism over the US-China trade deal. On the other side, the Indian currency has been under pressure amid surging oil prices, with both Brent and WTI brands hitting 3-month highs. Higher prices for oil negatively impact Indian importers. 

In the last six months or so, the rupee has declined against all majors amid India’s economic slowdown. Despite this, the Centre for Economic and Business Research (CEBR) said that India would overtake Germany and become the fourth-largest economy in 2026, after the US, China, and Japan. By 2034, India will overtake Japan, according to the report.

A recent survey carried out by Economic Times showed that the rupee might decline at least 3% next year, likely to touch record lows. The 20 market experts polled by the magazine cited fiscal troubles and global recession. 

The rupee has declined by over 11% against the British pound since the beginning of August. 

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