Higher fund flows into India, other EMs likely to boost asset prices

Stick to asset allocation, avoid wholesale portfolio changes

Investors are closely watching the dollar index (DXY), which is approaching the critical level of 100. It was at the 102.2 level on January 4. After peaking at 114.1 in September 2022, the DXY briefly dropped below 100 in July 2023 and rose to 107 in October. It has weakened again in recent months.

“The probability of interest rates declining has provided a fillip to non-dollar currencies and caused the dollar index to fall intermittently over the past three months,” says Joseph Thomas, head of research, Emkay Wealth Management.

Significance

The DXY measures the US dollar’s strength against a basket