IndiaCharts

Relative Rupee

Someone quoted on Twitter that the Rupee is not likely to fall as much as the dollar index will rise. That reminded me of the Relative Rupee indicator that I have been plotting since 2006 to call on inflation. This is the USDINR/DXY ratio and everytime it overshoots on the upside inflation follows. So here is a chart. Where are we? Since 2001 we are in a rising channel. Prior to that the trend was almost vertically up. But since then we move up and down this channel through periods of super INR weakness and then relative strength. The last major run up was from 2010-2013 and I forecast that on Indiacharts live. in 2015 too I put out this chart and the indicator did rise but not anything to cheer about. So now as the indicator comes closer to the lower end of the channel I think it is time that the INR starts beating the DXY in the dollar game. this should mean a period of major moves up in the USDINR that beat the DXY to it if the lower line holds in the coming weeks.

rr-161216

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