Investing.com – The dollar fell to a nearly four-month low against its rivals on Thursday, as investors bet on an ongoing rebound in emerging-market currencies amid improved sentiment in developing economies.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.59% to 93.56.
The dollar lost ground against emerging-market currencies like the South African rand, Turkish lira, and Argentinian peso as investors bet the worst may be over for developing markets.
“We think US growth will remain above trend and economic fundamentals in most (emerging market) countries remain healthy, creating fertile ground for a comeback in EM assets,” Goldman Sachs (NYSE:GS) said Wednesday. “We think period of diverging growth rates — driven by strong US outperformance — is largely behind us.”
Weakness in the dollar was further exacerbated by a stronger euro and pound, despite little sign that EU leaders had warmed up to the UK Prime Minister Theresa May’s Chequers proposal, which sets out rules that will govern the U.K’s future relationship with the EU after Brexit.
EU President Donald Tusk said the May’s proposals would “not work,” but the Prime Minister remained defiant, accusing EU leaders of engaging in “negotiating tactics.”
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