Daily Voice | US Dollar index expected to trade at 111 by year end, says Nikhil Vikamsey of Alpha Capital

Nikhil Vikamsey is the Senior Partner at Alpha Capital

"The US Dollar Index is expected to trade at 111 at the end of the calendar year as the trend shows," Nikhil Vikamsey, Senior Partner at Alpha Capital says in an interview to Moneycontrol.

The dollar has gained on the expectation that US economy will remain resilient to higher interest rates & oil prices than other economies, after the FED statement in last week it may hike the rates further, he feels.

The Chartered Accountant with over a decade of professional experience says IT sector is a contrarian bet which should do well in next few years. Valuations are also looking good, he believes.

Q: Do you think the US Dollar index will remain elevated for rest of the calendar year? If yes, then will it impact emerging markets including India?

The US Dollar index is expected to trade at 111 at the end of the calendar year as the trend shows. The dollar has gained on the expectation that US economy will remain resilient to higher interest rates & oil prices than other economies, after the FED statement in last week it may hike the rates further.

If the dollar will be elevated then it definitely impacted on the emerging countries like India, we may see volatility and correction in the market as the cost prices may impacted.

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Q: Also, will the US 10-year treasury yield maintain at around current levels even if there is easing in US inflation?

As the Fed has already signalled that the rate may hike in the next meeting then the yields might be higher or the same level despite of inflation ease in US.

Q: Hence, do you expect the FII outflow to continue from India?

In the rising interest rate scenario in US, the FIIs find the risk free market more attractive, hence the FII continue to outflow to take the advantage risk free returns in fixed income market.

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Q: Are the investors massively overweight on banks?

As the weightage of Bank in Nifty index is high and investors are putting their monies in Index Fund and ETF and Banking & Financial Services are overweighted on the Mutual Funds schemes as well, hence investors are overweighted towards banks.

Q. What kind of signals do you expect from the RBI commentary in October policy meeting, given the current global environment?

In bi-monthly Monetary Policy Committee (MPC) upcoming meeting in first week of October, it is expected that RBI will maintain a status quo on policy rates, the RBI is maintaining the same rate since February 2023.

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Q: What is your contrarian call in terms of sectors for next year?

IT is a sector which is backbone of future innovations and technology advancement. They have been in a downward trend due to rise in global interest rates which are somewhere near the peak zone.

Once global interest rate starts coming down and economies start recovering then they will see good recoveries.

Valuations are also looking good. It's a contrarian bet which should do well in the next few years.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.