By Gaurang Somaiya

Rupee fell to fresh all-time lows after consolidating in a narrow range for the last few months as the dollar index rebounded from its recent lows and is now headed to test level of 105. Also, the Chinese Yuan fell to the lowest level in three-months following expectation that the PBoC could announce more stimulus measures to stimulate the economy. 

Recent volatility in the India Rupee has been led more by global factors than by domestic factors as there has been no major change in the India fundamentals. Market are pricing in that the RBI too is likely to act soon on rate cuts but the timing of the same is uncertain. Like the Fed, market participants are pricing that the RBI could initiate a rate cut this year. 

On the …