The International Monetary Fund (IMF), in its World Economic Outlook (WEO) July update stated that the US dollar has weakened considerably since April, although yields in the United States are higher than those in other advanced economies such as the euro area. Some investors point out structural factors driving dollar depreciation, including shifts away from US securities, though current data on cross-border capital flows does not suggest a broad-based pullback. Increased hedging against dollar weakness resulting from investor concerns about changes in the historical hedging properties of the dollar has contributed to its depreciation in part. However, whether such a switch in the currencies' perceived risk-hedging properties is temporary or proves longer-lasting remains uncertain at this juncture. IMF noted further that many emerging market currencies have appreciated, and capital inflows have resumed since April, with investors seeing space for some emerging market central banks to ease.
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