Investors' aversion to risk has led the dollar to increase its value in recent years, but a turnaround has happened recently, with the dollar devaluing against emerging market currencies over the first half of this year. The situation has caused the dollar to lose its worldwide domination of currency markets, according to Anadolu Agency (AA).
Due to last year's recovery in the U.S. economy and the resulting expectations of a rate hike from the U.S. Federal Reserve (Fed), investors considered the dollar a safe haven, leading to increased demand.
However, global demand did not reach pre-crisis levels, and a decrease in trade volumes led central banks to take unconventional steps. This got in the way of the Fed's plans for a rate hike. Therefore, as expectations of an interest rate hike started to drop, emerging market currencies started to gain value against the dollar.
In numerical terms, the dollar, which rose 9 percent in the last two years, weakened 2.5 percent in the first half of the year. The dollar index closed the first half of the year at 96.1, down from 99.83 in January.
Due to this, the Brazilian real, Russian ruble, South African rand and Turkish lira experienced gains ranging between 1 percent and 20 percent.
The dollar-TL exchange rate lowered 1.5 percent between January and June, although it started the year at a high. The dollar-TL exchange rate fluctuated at around 2.92 in the late 2015. While the exchange rate saw a peak this year of TL 3.06, with weakening expectations of an interest rate hike from the Fed, it reached its lowest level of TL 2.78 in the same period.