Fortnightly outlook for currencies: Nirmal Bang
Going forward, the rupee may continue to strengthen to 44.10-20 as the RBI is widely expected to continue its rate tightening cycle and raise policy rates further, which would trigger more debt-related inflows.
April 09, 2011 / 12:10 PM IST
The fortnight gone by unfolded a series of events having profound consequences for the Forex market. The G7 launched its first coordinated yen-weakening intervention in a decade last week and euro zone officials postponed the setting up of the European Stability Mechanism or a permanent euro zone bailout fund to June.
Rising crude oil prices took a breather and see-sawed in a tight range as markets juggled the impact of the data showing rising crude oil inventories in the United States, while uncertainty over the ongoing crisis in Libya and the Middle East limited losses.
The US dollar continued to struggle against major currencies through most of the fortnight on build up in expectations that the Fed would lag behind other advanced economies in normalizing their policy rates.
However, the dollar witnessed some respite towards the end of the fortnight after an ADP Private Employment Report for March buoyed expectations over the pace of the economic recovery in the United States, the world