Sri Lanka, Aug. 1 -- The US dollar has shown early signs of stabilisation against other currencies in the past few weeks, as US policy uncertainty has eased from record highs, Fitch Ratings says in its latest FX Market Monitor. The DXY Dollar Index (a weighted-average of six bilateral exchange rates with developed market countries with reserve currencies) remains about 9% lower than at end-2024, but has appreciated by about 1.5% from its trough at the end of June.

Most major economies' currencies have strengthened against the US dollar this year. Developed market currencies have appreciated by an (unweighted) average of 7.8% since end-2024. Emerging market currencies also have generally strengthened against the dollar, with the notable exc...