Goldman Sachs says the dollar slump is over.

Stocks, the dollar, and emerging market currencies around the world remained under pressure for a second day yesterday after China devalued its currency again, boosting the appeal of top-rated government bonds.

The pound rose to its strongest level in a month against the dollar as the fastest increase in Britons’ wages since 2011 had traders rushing to reassess how soon the Bank of England may raise interest rates.

US PRESIDENT George W Bush’s administration is untroubled by the dollar’s decline, which may help boost sales and manufacturing jobs in an election year without an acceleration of inflation or higher interest rates.

THE markets reacted as anticipated yesterday as uncertainty over the duration and, to a lesser extent, the outcome of the war on Iraq hit equities and the dollar, pushing gold, oil and the euro up.