It was good start on Monday morning in Indian markets after Ireland bailout was almost looking final. But a late night development has casted doubt on probable bailout of Ireland.
The story goes this way, EURUSD fell over 180 points from the morning Asian session high, FTSE fell over a percent the DJIA is struggling to bring any buying sentiment. At the time of writing, the DJIA was down over 50 points.
It’s Ireland again back with some fresh political tension. Ireland's Green Party pulled the plug on Prime Minister Brian Cowen’s ruling coalition, saying it would leave the government once the 2011 budget and an international rescue were in place. A pair of independent members of parliament said Monday that they may not back the budget, potentially depriving the government of a working majority. It comes just a day after Ireland bowed to European pressure and applied for a bailout expected to total nearly 90 billion euros.
So on Tuesday, the market is expected to experience some long liquidation in the Asian session. The Indian rupee is likely to depreciate against the US dollar, the Euro as well as the GBP should see further sell off.
My pick for the day is USDINR. I feel the 45.70-45.80 is an achievable target and one should go long. ( Refer to my earlier article- Change in direction of Indian rupee for short term view)
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