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INR: Goldman Sachs Continue to Recommend EUR/INR Shorts
- Goldman Sachs note that the INR continues to stand out within the EM FX complex for its elevated carry-to-vol ratio, with carry attractiveness boosted even further when paired with EUR or CNH shorts. They expect this to remain the case as the RBI maintains a patient rate policy stance and a tight management of FX volatility.
- With the trade-weighted INR tracking closely the trade-weighted USD and the INR’s global betas below historical averages, Goldman Sachs see the Rupee as a key component of any EM FX carry strategy and therefore continue to recommend EUR/INR shorts.
- In terms of valuations, Goldman Sachs find that the INR is modestly undervalued versus the USD across different approaches, but think this is mostly a reflection of the Dollar’s overvaluation signal, rather than an India specific premium.
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.