New Levels on the USD

Quite in line with what was being expected of late, The USD has now seems, found a new level vis-a-vis the Yen and the Euro. And most of the blame needs to be picked up by the macromenspeakmore habbit of the current Fed chief who today urged lenders to forgive portions of mortgages held by homeowners at risk of defaulting.

``Efforts by both government and private-sector entities to reduce unnecessary foreclosures are helping, but more can, and should, be done,'' Bernanke said in a speech to bankers in Orlando, Florida, today. ``Principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure.''

So it seems the USD JPY pair is now poised to test the 100 levels soon. And quite contrary to what I believed that 103 might be a strong test for the pair, it has very smoothly slid to the sub 103 levels though still testing itself to stay near 103. My outlook for the currency for the weeks to come......... should try for the 100 levels pretty soon enough. Though again getting past 102 may be a bit difficult, but if done, expect a smooth sailing to the sub 101 levels. Though I might be away from the happenings in the markets for more than a week now, I would still shy away from forecasting a sub 100 level for the next week or so. Though I feel the currency may eventually give way in the coming months. And I have reasons to believe so..... Remember Mr Bernanke saying something on some Banks failing......Watch out for that. I believe he was not saying out of turn. Also watch out for the 12,000 mark on the Dow. If it slips, and slips convincingly even for a week, then new market realignments may take place not only on the forex side, but also in other markets worldwide.

Similar is the fate of the EUR USD pair. It has been flirting the 1.52 figure for some time now and after the Fed chief's remarks today, I now tend to believe that it will be more content being near it and more precisely in the 1.53 to 1.5450 range. Though being a new territory the Euro is treading into every now and then, you never know where it may bottom out.

Till I am back again for more on these two pairs, lets say Sayonara but not before my take on the USD INR pair. I have full faith in the currency nearing the 40.80 mark by the 3rd week of March and much further if the world markets keep up with this deceleration and the Indian markets catching up with them (Though I would put a bottom of 14,800 to 15,200 for the BSE to reach before eventually bottoming out). And just to prove that I am not just writing for the sake of writing here, I will reveal a small secret. I have a small personal exposure in The Yen that I need to convert to INR or the USD and am still taking my bets on a further improvement of my small fortune.