Currency corner: BNP Paribas sees Rupee above 44-46.25/$

The euro has been coming under tremendous pressure versus its European peers, especially the Swiss franc. Considered by investors as one of the few safe havens in a world of economic turmoil, the Switzerland National Bank (SNB) tried to reign in the franc by lowering interest rates but to no avail.

Senior currency strategist at BNP Paribas Chin Loo says the franc falls under the safe haven play and urges investors not to rule out some form of intervention by the SNB in depreciating the Swiss currency.
European governments are searching for ways to try and calm their jittery markets which might spark off a large selloff in equities. In Asia and other emerging markets, most central bankers have got their eye on the ball and have not raised key rates.
India, Loo says, has inflationary pressures to arrest. Hence, the RBI has been tightening the noose on interest rates.
On the dollar-rupee, she sees the rupee above 44-46.25 to the dollar with support coming in above 45.60. Below is a verbatim transcript of her interview. For complete details watch the accompanying video. Q: The Swiss National Bank has set the minimum Swiss franc rate at 1.2 per euro. That got a lot of people to sit up and take notice. Do you think this will hold and therefore you will see a bit of euro strength from hereon or will this be very short-lived?
A: I think the euro is coming under pressure against its European partners, particularly, against the Swiss franc because if the eurozone problems were to deepen and the confidence crisis deepens as well, then obviously the market is searching for safe haven bets again. Gold has rallied, the yen is doing very well and the Swiss franc falls under this safe haven play.
It is not surprising that the SNB has come out to say that the Swiss franc is too strong as it has the last time around. The market could as well come around to speculation as to whether the Swiss franc will be fixed against the euro just to stop it from appreciating further.
Yes, the jury is still out with regards to what the SNB could do in terms of trying to arrest the Swiss franc