- October 21, 2008
- Posted by: Ramki Ramakrishnan
- Category: Inr
I have great respect for people who put in a lot of thought and come up with fundamental reasons why a certain move should take place. Thus, when I read a report from a leading (investment) bank that the Indian Rupee could reach 57 to the Dollar, I took the time to read it carefully. The reason why I read such reports is because a lot of other people also read them, and tend to believe them, and act on those views. Unfortunately, time and again, many researchers come up with forecasts when a move is almost over. As recently as 8th August, the INR was below 42, and today it is trading above 49. Don’t we wish that we were told of this move earlier? I am reminded of the calls for oil to reach $200 when it was trading at $145, and look where we are today. Similarly, there were panic calls when the Euro was approaching the $1.60 levels. Anyone who is told that the Euro will reach 1.75 when it was at 1.60 will surely panic. Having said that, I need to offer some other insight. Now let me caution you that I can be completely wrong, and these other guys perfectly on the dot. However, it is useful to temper your excitement/panic with a different view of the market. Let me keep it brief. I think we will not go above Rs.50.50 per dollar. And we will come down to around 45.25 quite quickly after we complete this up-move. Here are my charts, and you might wish to print this out and stick it along with the report for 57 per $ and give me a shout when we reach either level. At the very least, you would have taught me to temper MY own views! Cheers.