FXpert

Emerging market currencies have had one of their worst years in a decade, but bruised investors tempted by what they see as cheap valuations are hoping the U.S. dollar's eight-month resurgence will end and the world won't tip into recession.

The dollar edged higher for a third day before a widely expected U.S. interest rate hike next week, but its gains were limited by growing expectations that the Federal Reserve may express a more cautious view on future rate rises.

Sterling fell to 20-month lows on Tuesday in the wake of reports that colleagues of Prime Minister Theresa May believed they had sufficient numbers to mount a no-confidence vote in her leadership.

Sterling tumbled to its weakest since April 2017 on Monday after Prime Minister Theresa May pulled a parliamentary vote on her Brexit deal with the European Union, panicking investors about deepening political uncertainty in Britain.

Sterling's near-term fate hangs on whether British Prime Minister Theresa May manages to get her Brexit withdrawal deal through Parliament, according to Reuters polls that also found economic growth will be weak.

The dollar, which has enjoyed an unrivalled surge against its peers this year, will be undermined in 2019 on increasing concerns about slowing U.S. economic growth, a Reuters poll of foreign exchange strategists showed.

The European Commission published on Wednesday non-binding proposals to boost the role of the euro in international payments and its use as a reserve currency to challenge the dominance of the dollar.

Denmark's central bank must begin purchases of the crown currency this month because it has weakened against the euro to its lowest level in almost three years, analysts said.

Sterling fell on Friday and was headed for a fourth consecutive week of losses as British Prime Minister Theresa May pressed ahead with plans for a parliamentary vote on her Brexit deal despite warnings it could topple her government.