India Rising

In a big picture (monthly charts) look at currencies a month ago, we noted that USD was turning former resistance into support after a minor breakout.  We noted the Euro breaking down from its bearish Rising Wedge and the bearish state of the commodity currencies (Canada and Aussie) and the bearish Japanese Yen (negatively mirroring Japan’s stock market).  At the end of the segment we noted that “The Rupee sure is volatile for a currency; volatile and bullish.”

Here is the updated chart of the currency that has been so well tended by the exception to the Central Bankers’ rule, Raghuram Rajan, the chief of the RBI.  Indeed, Mr. Volcker, err Mr. Rajan has received much love from Biiwii and NFTRH over the last year or so because he did what he thought was right in the battle against inflation, not what was politically expedient.  Rupee holders owe him a debt of gratitude.

Ref:  The economist who predicted the financial crisis just sounded another alarm  – it would be wise to listen this time

Combined with Narendra Modi’s pro-business, pro-investment orientation India now seems poised as a leader going forward.  We track the Bombay Sensex (flying around way up in blue sky territory) in a casual way each week in NFTRH, but upon the next global market correction India may be a place to park new funds.

For further views on the subject, Wisdom Tree discusses it’s views of India and how it manages its India Earnings Index, which is an area I will be interested in upon any new buying opportunities.

The thing about India is that it tended to its currency first and then its asset markets.  In other words, the Indian RBI Chief and Prime Minister each have their agendas in play and it is all because Rajan refused to follow the CB herd and instead, did the right thing.  I just like the India story, if that is not overly evident by now.