Thursday, January 10, 2008

Rupee vs the dollar: no way to go but up

As a contrarian I like to ask the man on the street about certain things before I make a decision of my own. Many of these people tend to hold onto their beliefs until it is too late.

Such a belief, in the ability of the dollar to recover, is what I found among some of the money changers in various cities. There are quite a few that are willing to give the spot rate, or even better (Rs. 40.5!), to a dollar. I will take that without thinking twice.

Meanwhile, with another .5 cut very likely within 2 weeks, the dollar is set to crater. I see the rupee hitting 35 this year, and assuming the current trend, 30 next year.

I will make sure to check with the foot-soldiers on a regular basis. That will hopefully help in detecting a turning point in time to make portfolio changes.

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