Rupee Impact: Rupee Turnaround

While we have already discussed and the story of Forex losses for Indian corporates is ongoing given the 15% correction in Rupee to its lowest levels in November alone, the rupee has already started its climb back, not as a intra day reaction but as a secular move as governments realise the fragility of the Euro albeitly slowly, and the Europeans battle with an extended low period for manufacturing

The resulting Euro weakness eases the pressure on

One rupee — Obverse
Image via Wikipedia

the rupee which should anyway never have been an issue to dollar’s supremacy in the last 3 months whence despite low trade flows it corrected under sharp shorting by traders as the unlikeliness of fiscal deficit coming near targets or trade and revenue deficits being under control was made clear here.

The Dollar may continue strongly however but election years may limit the trend for America as well despite the easing of US oil supply as WTI instead of slimming prices is on a b inge to catch up with Brent more than halfway as prices converge

Indian IT is an immediate loser in the resulting investment interests in India as gfrowth in retail and infrastructure takes center stage Consumer Discretionary businesses may be excluded bu tthe Indian consumption story is doing great esp as more urban influencers dedicate a higher 20%-50% of their disposable spend to entertainment and “going out”, eating out at an all time high despite the high food inflation figures Of course supermarket outings continue to masquerade as non TV entertainment for most couples

IMG_0979 - 2011-06-27 at 20-24-06
Image by KiltBear via Flickr

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