Rising dollar: FPI investment set to turn negative in September

Experts say EM market equities, currencies may remain weak unless there is positive news

The spike in the dollar has taken some zing out of emerging markets (EMs) in September. The dollar index, a gauge for the performance of the greenback against major global currencies, is hovering around its two-month low amid uncertainty over further stimulus measures in the US and rising Covid-19 cases worldwide. 

While the domestic equity markets have seen a sharp rebound in the past two trading sessions, analysts say the dollar’s ascent could be a cause for worry as it could further accelerate foreign portfolio investor (FPI) outflows. In the past six trading sessions, the overseas investor selling has topped the