Sundeep Bhandari, Regional Head-Global Markets (South Asia), Standard Chartered Bank said the yen has yet to go to 107-108 levels. He added that there are concerns in US, Europe and Japan. He told CNBC-TV18 that expects dollar to be at Rs 41 level by June and strengthening on dollar weakening.  

Excerpts from CNBC-TV18’s exclusive interview with Sundeep Bhandari:

Q: What is your view on the dollar-yen scenario? What is the view on the crosses, especially on the dollar-yen. We have seen it come all the way to 105 yen to the dollar from lows of below 100. How much is the headroom?

A: We have seen a considerable rebound from the crosses particularly the dollar strength. I would say the yen has yet to go further perhaps up to 107-108 levels. Likewise, the euro will also perhaps move down to the 145 level. The challenge is the mixed positive sentiment in the US and Europe where inflation is the key issue. But growth could be slowing. Likewise, there is concern on prices in Japan; inflation is still an agenda item and growth is really slowing.

Q: How does all this impact the dollar rupee? What are the ranges that you are looking at or advising your clients until June 30 and for the remaining part of the year as well?

A: We see the dollar by June to be at 41 level and towards the end of the year up to 42 levels. So, we see the dollar strengthening on the rupee weakening, going forward, primarily on the back of other factors like the current account deficit.

Q: Bonds have seen a significant rally and yields have fallen from 8.15 on the ten-year or 7.84. Are we overextended?

A: Certainly, we have seen a big rally and I think the rally is over yet. We are yet to see the bonds going to 7.95-7.96 levels before they weaken again. But there is more to go in the rally.