Investors Bet Indian Rupee Will Rise, US Dollar To Decline

Forex investors are betting that the Indian rupee will rise in 2024 and the US dollar could begin to decline. Investors bet that BRICS member India’s rupee could break out of its narrow range making the US dollar head south. The USD-INR trading pair saw an exponential increase in volume in the first few trading days in January 2024. The volumes surged millions of dollars in Rupee vs US dollar trading, and the direction of the trades is pointing towards the INR rising and the USD declining.

Also Read: BRICS: JP Morgan Predicts Future of the US Dollar Against Chinese Yuan

BRICS: Indian Rupee To Rise & US Dollar Might Dip, Bet Currency Investors

The rise in bets comes after leading banks called clients to take long positions in the rupee against the US dollar, reported Reuters. BRICS member India is gaining the confidence of foreign exchange investors who believe the rupee could trample the US dollar. Offshore banks have advised clients to outright buy INR-USD trading pairs or use the Put options.

Also Read: These 25 Countries Are Ready To Join BRICS in 2024

A Put option permits investors to sell the USD-INR pair at a particular rate called the strike price. The buyer pays a small amount as fees for the option and losses are limited to the premium paid. “Offshore, nearly all banks are calling on their clients to take long positions (on the rupee), whether via outright or put (USD/INR) options,” said a Portfolio Manager at a Singapore-based hedge fund to Reuters.

The development comes at a time when BRICS countries are looking to strengthen their local currency against the US dollar. BRICS is on a world tour convincing other developing nations to ditch the US dollar and trade in local currencies.

Also Read: BRICS Offers Bonds Worth $28 Billion in Local Currency, Not US Dollar

The BRICS alliance has been successful so far as a handful of countries are willing to settle cross-border transactions without depending on the US dollar. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar.