The past two months have seen a significant deterioration in the value of the US dollar. This is evident in the sharp drop in the US dollar index, which tracks the value of the dollar against six developed-market currencies — the euro, pound sterling, Swiss franc, yen, Canadian dollar and Norwegian krone.

The bulk of the weighting in the index is made up of the euro-dollar pair. After a sudden spike in value around the initial outbreak of Covid-19, the dollar was met with selling pressure in late March. With that spike, the index tested the prior high from late 2016 at the 104 area. Since then, it has been one-way traffic down...

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