BRICS Forecast: Investors Eye Rupee Rise, US Dollar Dip in Crypto Market

• Predicted Rise of Indian Rupee Against US Dollar: A Forex Analysis
• USD-INR Trading Pair: Surge in Volume
• BRICS: Future of US Dollar and Indian Rupee
• Understanding the Put Option
• BRICS Nations and the US Dollar
• BRICS: Success in Promoting Local Currencies

Predicted Rise of Indian Rupee Against US Dollar: A Forex Analysis

Forex market participants predict a potential rise in the value of Indian Rupee by 2024, while the US dollar might experience a downward trend. The speculation is rooted in the belief that the Indian Rupee, a currency of a BRICS nation, may escape its current narrow trading range, resulting in a dip in the US dollar's dominance.

USD-INR Trading Pair: Surge in Volume

In the initial trading days of January 2024, the USD-INR trading pair saw a significant volume increase. The pair's trading volume ballooned by millions of dollars, with the trading direction indicating a potential rise of INR and a fall of USD.

BRICS: Future of US Dollar and Indian Rupee

Following notable banks' recommendations to their clients for taking long positions in the rupee against the US dollar, a rise in similar bets has been observed. This development has significantly boosted the confidence of Forex investors in the Indian Rupee's potential to outdo the US dollar. Consequently, offshore banks have suggested to their clients either to buy INR-USD trading pairs outright or to exercise the Put options.

Understanding the Put Option

A Put option allows investors to sell the USD-INR pair at a specified rate, known as the strike price. The buyer pays a nominal fee for the option, and potential losses are confined to the paid premium.

BRICS Nations and the US Dollar

The recent developments occur against the backdrop of BRICS nations' efforts to fortify their local currencies against the US dollar. The BRICS alliance is attempting to persuade other emerging economies to abandon the US dollar and trade in local currencies.

BRICS: Success in Promoting Local Currencies

The BRICS alliance has seen initial success, with several countries showing willingness to conduct cross-border transactions independent of the US dollar. An investigation into the potential impacts on various US sectors if BRICS abandons the dollar provides additional insights into this development.

Edited by Jonathan Stoker