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This trend is further reinforced by the euro's relative strength against the dollar, as the European Central Bank is expected to continue increasing interest rates. Such movements suggest that investors are diversifying their portfolios away from the dollar, seeking more stable or higher-yielding alternative currencies.
Market Expectations and Long-Term Outlook
Market analysts are increasingly warning that these short-term movements may be the beginning of a long-term trend toward dollar depreciation. The Financial Times noted that this month alone, asset managers are on track to dump 1.6% of their dollar holdings, the steepest monthly outflow in over a year.