The U.S. dollar lost value against a basket of currencies last week, hitting its lowest level in more than two months, with investors de-risking their portfolios ahead of the Federal Reserve's anticipated interest rate hikes. On January 13, the dollar index fell 0.666% to 94.97, reaching a two-year low.
However, a weakening dollar is highly correlated with gains in emerging markets—when the dollar declines, the value of foreign-currency-denominated assets rises for U.S, investors. A weaker currency also benefits emerging market countries that have borrowed in U.S. dollars.
