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MENAFN- Daily Forex)
The US dollar has rallied again during the trading session on Friday as the greenback continues to go higher against the Indian rupee, as well as many other currencies around the world. Emerging markets continue to be pounded as there are a lot of concerns when it comes to the overall economic situation around the world.
That being said, it is worth noting that the Bank of India continues to intervene in the market occasionally, as the Indian rupee is not a freely traded currency all the time period there is a bit of a range that the Bank of India feels comfortable with, and right now it looks like the upper bound is somewhere near the 83.70 rupee level. If we can break above there, then the market could start to rally towards the ₹84 level but we need to have the Bank of India get out of the way.
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Emerging markets
Emerging markets will continue to suffer at the hands of U.S. dollar strength, as traders are starting to worry about global growth and of course therefore smaller currencies such as the Indian rupee are not trust it. If the interest rates in America continued to climb, it does make sense that money would flow into the US dollar overall.
It is very possible that we would see market participants continue to buy short turn pullbacks as the safety of the US dollar is paramount in an environment that seemingly is only getting worse. Underneath, I see the 83 rupee level as an area that a lot of people will be paying close attention to. This is an area that I think will continue to be crucial, and it's not until we break down below that level that I think you could have a situation where you should start shorting the greenback.
All things being equal, I think the Federal Reserve will stay pat for sometime, and that will continue to be a situation that lifts The US dollar over the longer term period I think ultimately this is a market that has to make a bigger decision sooner or later period remember that this market does tend to be very choppy, so you will have to be patient for the next move.
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