The US Federal Reserve is trying to not let the economy overheat. If inflation and growth improve, Fed could go for three rate hikes next year, believes Brian Jacobsen of Wells Fargo Fund Management. Dollar index could appreciate 3 percent further in next three months. The strengthening dollar will affect the emerging market currencies, Jacobsen said. However, he also believes that India is better insulated as compared to other EMs.Wells Fargo has increased its exposure in India as equities are valued fine. Demonetisation will lead to temporary economic slowdown, but if the Reserve Bank does not cut rates, it will be time to take risk off the tables, he added. Watch video for more..
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