The dollar strengthened a fifth day versus the euro as U.S. consumer spending rose the most in three years a day after the Federal Reserve scaled back bond purchases that weaken the greenback and support global asset prices.
Hungary’s forint dropped as emerging-market peers the South African rand and the real of Brazil rebounded from a week-long rout. The 18-nation shared currency fell as German inflation unexpectedly stayed unchanged in January, signaling subdued price pressure in the euro-area’s largest economy.
“The selloff in emerging markets is encouraging money to divest into developed markets, where the dollar is a beneficiary of that,” Brian Daingerfield, a Stamford, Connecticut-based currency strategist at Royal Bank of Scotland Group Plc, said in a phone interview. “What’s going on in EM is certainly the larger driver of foreign-exchange markets right now.”
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