Signs are flashing that dollar plunge has gone too far, too fast

Toronto

THE dollar's third straight weekly decline is triggering signals that the US currency weakness may be overdone.

The greenback has gone from beating its major peers last year to losses against every one of those currencies this month. That's pushed one measure of dollar momentum, the relative strength index, to its most extreme in almost four years as the Federal Reserve signalled a slower pace for raising interest rates.

The dollar outperformed most developed and emerging-market currencies the past two years as the promise of superior economic growth and rising interest rates contrasted with sluggish economic activity elsewhere. Investors are question…