Pound Indian Rupee (GBP/INR) Exchange Rate Falls as Cross-Party Brexit Talks in the UK Set to Close
The Pound Sterling Indian Rupee (GBP/INR) exchange rate slipped this morning and the pairing is currently trading at an inter-bank rate of ₹89.6600.
On Friday reports revealed that cross-party talks between the Conservatives and Labour party were set to close.
This comes after six-weeks of discussion, during which an agreement was unable to be made between the government and its opposition Labour Party.
This dampened sentiment in the Pound, creating a fresh wave of Brexit uncertainty.
Sterling (GBP) Falls Following ‘Very Frank’ Talks between Theresa May and 1922 Committee
Meanwhile, on Thursday it was announced that Prime Minister Theresa May has said she will set a timetable for her departure after the next Brexit vote in June.
This was announced following a meeting between herself and senior Conservative MPs.
Commenting on Thursday’s meeting, Chairman of the 1922 Committee Sir Graham Brady said an agreement over May’s future had been reached during ‘very frank’ talks.
Sir Graham also stated that there was now ‘greater clarity’.
However, commenting on this, Chief Currency Strategist at RBX Capital Markets, Adam Cole said:
‘What we’re seeing is the market pricing in a higher probability of an exit without a deal.
‘It looks increasingly likely she [Theresa May] will be replaced by a pro-Brexit PM with no election, and that automatically increases the chances of a no-deal Brexit.’
Indian Rupee (INR) Rises despite Heightened US-China Trade Tensions
Trade tensions between the US and China have dampened sentiment in the Indian Rupee, which fell around 1.6% against the US Dollar after US President Trump’s most recent criticisms of China.
Tensions between Washington and Beijing have escalated further with Chinese state media calling for the US to show ‘sincerity’ or cancel trade talks altogether.
Reports suggest that China is prepared to suspend trade discussions with the US if the United States continues its tough action of effectively banning Huawei technology products from the US.
Taoran Notes, a social media account affiliated with Economic Daily stated:
‘If there is no real concrete action by the United States, it will be meaningless for you to come and talk.
‘It is better to suspend the consultation completely and return to the normal working track.’
Meanwhile, in a thinly-veiled attack on Trump, China’s former central bank governor Zhou Xiaochuan said:
‘Some newly appointed leaders violate economic theory and common sense, and only depend on commercial thinking when making policy decisions. I believe this unscientific way of working, which ignores the knowledge and theory our predecessors accumulated, will hit a wall.’
Pound Indian Rupee Outlook: Will a Dovish BoE Weigh on GBP?
Looking ahead to next week’s session it is likely the Pound (GBP) will slip against the Indian Rupee (INR) following the release of the UK Inflation report hearings.
If it is revealed the Bank of England has a dovish economic outlook, sentiment in Sterling could be dampened.
Meanwhile, on Wednesday Sterling could rise against the Indian Rupee following the release of the UK Consumer Price Index (CPI).
If CPI rises higher than forecast in April, it could buoy the Pound.
On Thursday the Indian general election could cause the Indian Rupee to slide against the Pound.
If Prime Minister Narendra Modi is unable to repeat his landslide victory of 2014 it could cause the Rupee to tumble.