GBP/INR: Pound Drops Amid UK-EU Tensions on Irish Border

GBP/INR is declining on Wednesday morning, after gaining 0.48% yesterday.

Currently, GBP/INR is trading at 93.165, down 0.22% as of 6:15 AM UTC. On Tuesday, the price touched a bottom at 92.833.

India Might Reach Trade Deal with US

The Indian rupee is supported by investors’ hopes that Indian Prime Minister Narendra Modi and US President Donald Trump would reach a phase one trade deal. Trump visited India from Monday to Tuesday, and agreed to conclude the ongoing negotiations, the White House says. The visit should help the two countries speed up the signing of a bilateral trade agreement. The White House said in a statement:

“They (Trump and Modi) agreed to promptly conclude the ongoing negotiations, which they hope can become phase one of a comprehensive bilateral trade agreement that reflects the true ambition and full potential of the bilateral commercial relations.”

UK-EU Trade Talks Will Be Hard

Elsewhere, the British pound continues to be under pressure amid fears that the trade talks between Britain and the European Union will be tough. Yesterday, the EU said that the post-Brexit negotiations would start next Monday, but they will be “very hard” and might fail if the UK doesn’t make efforts to secure the Irish border as previously agreed by Prime Minister Boris Johnson in his Withdrawal Agreement Bill (WAB).

The Irish border, the only land frontier between the EU and the UK, has been a sensitive topic since the referendum in 2016. Ireland said that any trade deal would be hardly possible by the end of 2020 if the UK doesn’t keep its promise to implement checks and controls on goods moving from the mainland to Northern Ireland.

Irish Foreign Minister Simon Coveney told the media:

“If there isn’t progress on the infrastructure needed in the next few months, that’s going to be a very worrying signal for whether or not it’s going to be possible to conclude something sensible before the end of the year. If that doesn’t happen, it will damage significantly the prospects of being able to get even a bare-bones trade agreement by the end of the year.”

Coveney’s message was confirmed by Europe’s Brexit negotiator Michel Barnier.

The UK will release its own negotiating stance tomorrow.

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