Can Dollar Index disrupt INR stability

Can you predict the future ?

The Hang Seng index and the Nifty in US dollar terms have long been observed for their correlation. Over the past 30 years, these markets displayed striking similarities in performance. From the early nineties until the COVID-19 bottom, their movements were almost identical, with peaks and troughs mirroring each other.

However, a significant shift occurred post the COVID-19 bottom in 2020. While Nifty surged, doubling and even tripling from its lows, the Hang Seng index plummeted by nearly 40%. This sudden and extreme divergence between the two markets raised questions about the underlying factors driving this disparity. . . . .

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Can Dollar Index disrupt INR stability

The dollar index, a measure of the value of the United States dollar relative to a basket of foreign currencies, has been displaying significant movement recently. Since October of 2022, it has been fluctuating within a range of 106 to 100. However, there are indications that it may soon break out of this range. This is crucial because a rise in the dollar index could adversely affect the Indian rupee.

If the dollar index continues to strengthen, it is likely to put pressure on the Indian rupee. Despite the dollar index falling in the past . . . .

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WeekendInvesting Daily Bytes

The day began with a substantial gap down in the markets, followed by a surprising rebound in the second half. Despite initial pessimism, the market managed to close at the same level as two days prior, indicating resilience.

The sudden recovery suggests that the initial market dip may have been a one-off event, possibly related to geopolitical tensions. Weak hands seem to have exited the market, restoring confidence and bringing it back to its original state.

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