Bond yields, Rupee to see higher impact due to Budget than markets

The past few months have seen massive volatility in the global foreign exchange market. The dollar is up, the yen has crashed and most other currencies have lost ground versus the dollar. Several factors have been at play.

In terms of geopolitics, there was a shock result to the US elections. The dollar strengthened and the Federal Reserve’s decision to hike the policy rate in December pushed it up further. US bond market yields have shot up. It’s forecast that US inflation will rise. President-elect Donald Trump’s protectionist policies could mean more US manufacturing. Employment is tight and wages are