Pound Sterling to Indian Rupee (GBP/INR) Exchange Rate News – Rupee firms on trade deficit data

The Indian Rupee firmed slightly against the Pound following the release of data which showed that India’s trade deficit narrowed unexpectedly in January. Against the US Dollar the currency made gains due to the ‘Greenback’ being under pressure as market await new Federal Reserve Chairman Janet Yellen’s first testimonial to Congress.

According to the Indian trade ministry the nation’s trade deficit narrowed to $9.92 billion last month, down from the $10.4 billion recorded in December. The deficit was said to have narrowed due to a 77% drop in gold and silver imports. Overall imports fell by 18% year on year. Exports also increased, improving the outlook for the country’s huge current account deficit.

“We expect India’s trade deficit to remain manageable in the coming months. We now see significant risks that the current account deficit in the year through March will be lower than our forecast of $48 billion,” said an analyst at Barclays Plc.

The Rupee’s gains are likely to be short-lived however as tomorrow sees the release of the latest Indian industrial production data. Economists are forecasting that production contracted by 1.2% in December from the previous year. Wednesday will also see the release of inflation data which is expected to show that prices rose by 9.11% in January.

The Pound found some support earlier in the session after UK retail sales growth accelerated in January. According to the British Retail Consortium retail sales climbed by 3.9% from the previous year.