Weekly FX update: Dollar up on continued search for safe haven assets

24 May 2010

Price activity in the FX markets was driven by a heightened state of risk aversion last week. Higher yielding currencies and commodity currencies in particular bore the brunt of the selloff as large outflows resulted from investors fleeing to safe haven assets. AUDUSD gave up 6.14% to close the week more than 500 points lower at 0.8318 while the CAD depreciated close to 2.5% against the US Dollar, ending the week at 1.0595. Gold snapped its run to record its first week lower, closing at 1177 levels (lower by 4.4%) after an impressive four week run during which the precious metal touched 1249. Surprisingly, the EURUSD pair turned in its first week in the green to close the week more than 200 points higher after posting five consecutive weeks of lower closings.

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