Dollar Plunge Shows Global Faith in U.S.-Driven Recovery Waning
- Greenback's 11-month low means unwelcome strength in yen, euro
- Central-bank inaction spawns unlikely emerging-market gains
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The dollar’s downturn is a sign investors are losing faith in the ability of world’s last remaining growth engine to keep the global economy afloat.
The U.S. currency fell for a third month, the longest stretch since before it embarked on two-year, 20 percent rally in July 2014. Growth in the world’s biggest economy slowed to a 0.5 percent annual rate in the first quarter, and economists have slashed the forecasts for this year to 2 percent from 2.5 percent in December. As the dollar retreats, it also means strength in the yen and the euro, adding to the challenge for central banks seeking to bolster growth and inflation through weak currencies.