A fringe-formation theory for a dual-beam illumination configuration that leads to a twofold increase in sensitivity for the measurement of in-plane displacement is described. Here we have taken into account all four beams simultaneously that are generated at the image plane owing to two-beam illumination and their cross-interference terms for fringe formation. We show that the sensitivity obtainable is the usual interferometric sensitivity when we take into account all four beams simultaneously and doubles only when the retroreflected beams are observed. A detailed theory and an experimental demonstration of the method are presented.
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