The US dollar swept the currencies of emerging countries this week, as it fell by about one percent since the beginning of this week, recording losses for the fifth consecutive session against the dollar.
This paves the way for it to erase all the gains it has achieved since the beginning of this year, under pressure from the strong gains of the dollar, which rose towards its highest level in six months with increasing expectations of an additional interest rate hike this year. The emerging currency market was also exposed to strong pressure from the decline in the value of the Chinese yuan, which… It fell to its lowest level in 16 years against the dollar
Despite the dollar’s decline on Friday, it is still heading towards achieving the longest series of weekly gains in 9 years, supported by a set of strong data on the US economy that also made the prospects of the Federal Reserve (the US central bank) ending the cycle of raising interest rates in doubt.
The Chinese yuan also declined in local trading to its lowest level since 2007, as it was exposed to pressure from capital outflow and the widening gap in returns with major economies.
The dollar index, which measures the performance of the US currency against a basket of major currencies, fell 0.1 percent to 104.93 points, but remained close to the highest level in 6 months recorded in the previous session at 105.15 points.
The index is heading to expand its gains for the eighth consecutive week, with an increase of 0.6 percent so far.
The euro witnessed losses for eight consecutive weeks, but in the latest trading it rose 0.1 percent to $1.0709 after falling to its lowest level in three months at $1.0686 yesterday, Thursday.