According to market analysts, the continuing fall in the rates of Euro will make it a favorable currency for funding in international investments.

A Morgan Stanley report has pointed out that euro rates are now on the decline. According to its estimates, the Euro will fall below the average G10 carry in 2010 and will become a favorite funding currency as US rates increase further.

The current US fed rate is at 0.12 percent compared to 0.07 percent three months ago. On the other hand, the European benchmark key interst rate is at 1 percent compared to 1.25 percent three moths ago.

Global investors have been selling where interest rates were lower and purchased currencies like the Indian rupee to take advantage of the interest rates. This global flow of investments is now moving to the Euro market. The trend will affect the Sensex and as well as shares in the Indian stock markets.

Euro is likely to play a larger role in causes for the movements in Sensex. The US dollar changes was the cause for 70 percent of the Sensex movement earlier, however, the Euro would become more important in influencing the index in he country.