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The upcoming G7 summit has triggered renewed concerns regarding a worldwide trade war has impacted negatively on the currency value of many countries including Rand and INR.

However Rand rallied with the weakness exhibited by dollar, while the ReserveBank of India increased its interest rates to curb the inflationary effect caused by soaring oil prices and weakening of Indian currency. The depreciating value of market currencies is due to investors looking to gain from the stronger US economy.

However, the dominant phase of US dollar is all set to decline in the coming months, according to a Reuters report. Top financial analysts cite that the stabilization of global data and normalization of global policies overshadows the cyclic divergence that favored the USD until now.

The decelerating fiscal position in the US in spite of the high interest rates is another reason for the weakening dollar. The issuance of government bond to compensate the tax deductions passed in 2017 by the Congress has landed the dollar in a high risk state. Senior market experts fear that a fiscal expansion of such a scale is sure to incite a bigger deficit.

The outlook for dollar is based more on the monetary policies followed by central banks like the European Central Bank. On June 6, Euro managed to rally against USD with a high over a 10 day span. This improved outlook comes in the wake of the ECB calling for a policy meeting debate on terminating the bond purchasing program by 2018.

Sterling and Euro are some of the major currencies expected to increase in value in 2018.  Sterling has the potential to recover losses that ensued after the Brexit move. EUR is expected to reach $1.24, which is a 5% increase from its present value of $1.18.

The G7 summit has however made USD a bit softer due to fear of members not reaching a consensus regarding the trade tensions that prevail now.