In Most of the times, Global Markets move relative to one another. If you think about the Global Intermarket relationship as a big cobweb, US Dollar is the major link that connects that cobweb. Anyone who’s interested in knowing what going on in Nifty 50 should watch the co-relation between US Dollar and Nifty 50. Just take a look at this chart
USDINR and Nifty 50 Price Action
From last couple of days, we can witness a stagnating USD (USDINR moving in sideways) which is co – relating with rising Nifty 50 Index prices. As I pointed out in previous contents, USDINR and Nifty 50 have a negative Intermarket relationship. This relationship is working out quite well from last few months, to be precise, it’s from March 2020. We can also notice it clearly over the chart.
This is an Indication that Foreign Inflows and FII’s are still the major factors driving the Price behavior of Nifty 50. Any drastic changes in the USDINR exchange rate will have a major Impact on Nifty 50. Traders, who actively trade in Nifty 50, should keep an eye on the USDINR Forex rate which can give informative insights about the market direction.
