The Australian dollar has dropped around 3 per cent in the last few days. August has been an interesting month where we have seen a high of .7760 against the greenback and then on the last day of winters AUD/USD was trading at .7510.
We had the Feds chairperson Janet Yellen speak about the US economy last month who clearly indicated that we could be looking at a rate hike in US as early as September and if not then may be this year sometime? If this happens then surely this would be a taken as bullish for the US dollar.
In India Raghuram Rajan RBI governor in India is now to be succeeded by Urjit Patel from September 2016. We have had tamed inflation and a slowdown in rupee decline while Raghuram Rajan was in tenure. We would expect a similar kind of pressure and expectations from Urjit Patel as well.
Urjit has some very strong credentials and experience behind him and although the market seems to be giving a thumbs up to his appointment at present we would still see some uncertainty for a few months.
In my view importers should be looking at some cover for their exposures.
On a different note something to share—did you know that on the Indian currency note the value of the currency is written in 15 different languages!
On 2 September at 1.08 pm AUD/USD was trading at .7551 an AUD/INR was at 50.44.