A rebound in the U.S. dollar index above 100 could trigger outflows from emerging markets, with Elara Capital warning of a potential reversal in fund flows.
Experts believe the dollar index could re-test the earlier highs again in the next couple of months before going down. So, it’s best for investors to stay diversified across asset classes in accordance with their asset allocation.
Reduced sensitivity of rupee to the dollar index has occurred in conjunction with the still-high correlation of other Asia FX with the dollar
Nirmal Bang has come out with its report on Rupee. According to the research firm, expected range for the pair in spot market is 56.90-57.35.
Nirmal Bang has come out with its report on currency. According to the research firm, the local currency is expected to trade in a range of 56.60-55.95 in the spot market.
The graph has been divided into two phases - Pre QE2 and Post QE2. It can be seen that during Pre QE2 phase, the MSCI Equity Index and Thomson Reuters/Jefferies CRB Index both being broad gauge of global equity index and commodity prices respectively, had been falling and Dollar index was rising.
Mecklai graph of the day - DXY inches closer towards major resistance
Dollar Index has weakened on most occasions post the FOMC meeting (i.e. during the week of FOMC meeting). Analysts are expecting the Fed to continue with its stance of low interest rate until late-2014.
Callum Henderson of Standard Chartered Bank in an interview on CNBC-TV18 gives his perspective on the different currencies pitting against the dollar and what the road ahead looks like for the currency space.