GBP/INR is declining in early trading on Friday. Currently, one British pound buys 93.575 Indian rupees, down 0.10% as of 5:50 AM UTC.
The markets are quiet today, so investors are regurgitating the economic updates that came out earlier this week.
The decline can be explained by technical analysis reasons, as the pair is trying to break a strong resistance level. Previously, the 93.600 territory acted as a resistance line on two occasions in the last month, so the price might continue to move in a sideways trend for a while.
When looking at the larger picture, the pound is still in a better position and probably going through a temporary correction right now. The British currency has gained 1.30% since Monday against its Indian counterpart, driven by strong UK labor market data and a surprising increase in sentiment across factories. The positive economic data eased expectations that the Bank of England (BoE) will cut its interest rate for the first time since 2016 later this month. However, the central bank is still likely to reduce the rate in the first half of the year.
Recently, several members of the BoE’s Monetary Policy Committee (MPC), including Governor Mark Carney, said that they would support more stimulus to push the economy.
Yesterday, UK Prime Minister Boris Johnson’s Brexit deal has become law officially, after passing through the vote of the House of Lords. The move paved the way for the country to exit the European bloc next week. The Queen signed off the Withdrawal Agreement Act as well.
The Indian rupee continues to be under pressure amid the country’s economic struggle and fears of a new virus that started in Chinese city Wuhan. The new strain of a coronavirus has already killed 25 people in China and infected over 800 people. The World Health Organization declared an emergency, though it hasn’t declared the epidemic of global concern.
Wuhan is quickly building a new 1,000-bed hospital right now to treat patients.
The Chinese embassy in India initiated two hotlines to help and inform people about the virus.