King Dollar's Decline Ripples Across the Globe
(Reuters) - An accelerating decline in the U.S. dollar is reverberating around the world, adding fuel to a global momentum rally that has boosted prices for everything from technology stocks to gold.
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The U.S. dollar index =USD, which measures the greenback against six other major currencies, is down around 9% from its March highs and is on track for its worst month since 2011, pressured in part by expectations that the United States will take a bigger hit to growth than other economies from the coronavirus pandemic.
Because of the dollar’s central role in the global economy, a sustained selloff in the greenback could buoy a broad market rally driven by expectations of continued economic stimulus from the world’s central banks and governments.
At the same time, further dollar weakness would likely be an unwelcome development for economies such as Europe and Japan, as their own rising currencies threaten to weigh on growth and efforts to spark inflation.
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