With the U.S. Federal Reserve pledging to be “patient” in future rate hikes, emerging markets should do better that will year, as well as also may in fact even have “a decent rally,” one strategist told CNBC on Monday.
Last year, economic troubles in Argentina as well as also Turkey, as well as the Fed tightening monetary policy, had caused a selloff in several emerging market currencies. Some emerging market stock indexes also saw steep declines. Rising interest rates stateside make the idea harder for emerging economies to service their U.S-dollar debt.
yet those markets should turn around that will year, said Mary Nicola, a G-10 foreign exchange as well as also Asian fixed income strategist at Eastspring Investments.
“today that will the Fed can be going to be patient, we think that will EM carries a bit to go. If you look at what we saw last year in terms of emerging markets, the EM rout had much to do with the fact that will the Fed was hiking,” she told CNBC’s “Squawk Box” on Monday. “today that will the Fed hikes are off the table for a little bit, as well as also the Fed can afford to be patient, EM funding conditions won’t be as tight as the idea was before.”