Many of the readers of my blog would have noted my bullishness on the Dollar vis a vis the Rupee since it was sub-Rs 40 levels.
Many of you would have 'heard / read ' that financial markets are linked. In this context, the link between Sensex and the Indian Rupee (Dollar-rupee) is worth noting.
Inherently a strong dollar-rupee rate is not a good sign for the stock markets as there is a negative correlation between the two. The Current 'pause' in the upmove of the Dollar-rupee is worrying.
I expect that a break above Rs 43 may be triggered by a further downmove in the Indian stock markets.
Moreover, the other major factor affecting the currency is the Crude Oil Prices which are refusing to go down (that is another instance of an inter-market linkage).
So, Stock market investors ...keep an eye on the Dollar-Rupee and Crude Oil prices !!
(Whoever said investing was an easy game???)
CA Rajiv D Khatlawala
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