GBP/INR has managed to recover yesterday losses. Currently, the pair is trading at 92.433, up 0.28% as of 6:00 AM UTC.

On Wednesday, the pound declined on weak inflation data released by the UK’s Office for National Statistics (ONS). Nevertheless, the British currency bounced back on positive housing market data while the rupee couldn’t rely on disappointing trade data for December.

Earlier today, the UK’s Royal Institution of Chartered Surveyors (RICS) said that agreed home sales increased for the first time since May last year. Expectations for future sales also surged. Thus, the British housing market revived after Prime Minister Boris Johnson’s major win last month, which brought in some optimism.

RICS Chief Economist Simon Rubinsohn commented:

“Whether the improvement in sentiment can be sustained remains to be seen given that there is so much work to be done over the course of this year in determining the nature of the eventual Brexit deal.”

Judging by larger timeframes, the British housing market, along with the economy in general, has weakened since the Brexit referendum in 2016. However, in December, the RICS house price balance surged to -2, from -11 in November.

The rupee has been under increased pressure after the Indian government said that exports declined 1.8% last month, to $27.36 billion, amid high volatility in the currency and commodity prices. In November, exports had decreased by 0.34%. Imports last month tumbled 8.83% to $38.61 billion.

Thus, the trade deficit narrowed down to $11.25 billion in December, from $12.12 billion the previous month, according to the Commerce and Industry Ministry.

Imports measure was dragged down by transport equipment, precious stones, gold, petroleum, and electronic goods.

Oil imports fell 0.83% to $10.69 billion in December, while gold imports dropped by 3.93% to $2.46 billion.

Non-oil non-gold imports, which shows the strength of demand at home, contracted by 12.2%. ICRA economist Aditi Nayar argues that the double-digit decline is a cause of concern.

The Indian economy has been struggling for months to revive its economy but without significant results. The central bank cut the interest rates several times last year, while the government launched massive stimulus measures. Despite everything, the GDP growth remains at six-year lows.


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