Expect rupee to test 57 per dlr in three months: JP Morgan

Fri May 23, 2014 9:42pm IST

A private money trader counts Indian Rupee currency notes at a shop in Mumbai August 1, 2013. REUTERS/Vivek Prakash/Files

A private money trader counts Indian Rupee currency notes at a shop in Mumbai August 1, 2013.

Credit: Reuters/Vivek Prakash/Files

Related Topics

Reuters Market Eye - J.P.Morgan expects USD/INR to test 57 per dollar in the next three months as Narendra Modi's sweeping electoral victory "is a more transformational outcome for India macro than most could have imagined" and will thus attract foreign inflows.

The bank adds it expects Modi to fight inflation through administrative measures, and the focus on the RBI should reduce.

As a result, J.P.Morgan recommends receiving 5-year OIS expecting the rate to fall 25-50 bps, inverting the swap curve further.

However, J.P.Morgan warns that higher borrowing from the new government could hurt longer-tenure bonds and recommends investors stick to the 5-year government bonds for carry.

(Reporting by Neha Dasgupta)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

School Shooting

School Shooting

Two killed, four wounded in Washington state school shooting.  Full Article 

Sundar Pichai Elevated

Sundar Pichai Elevated

Google's Pichai to oversee major products and services.  Full Article 

Need For Reforms

Need For Reforms

Euro zone risks "relapse into recession" without structural reforms - Draghi.  Full Article 

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Health Of Lenders

Health Of Lenders

25 European banks set to fail health checks - sources.  Full Article 

Special Report

Special Report

Why Madrid's poor fear Goldman Sachs and Blackstone  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage