The week has started with a surge of risk aversion on the Forex market as the collapse of China’s stock market scared investors. Surprisingly enough, the dollar dropped against its major rivals after the event. Yet the currency reversed its losses very quickly, rising for the most part of the week.
China’s stocks plunged yet again on Monday, driving investors to safer assets. The dollar did not profit from this as the euro overtook the role of a safe haven from the US currency. Yet the greenback reversed its movement on the very next day and ended the trading week with gains against most currencies as speculations about a September interest rate hike from the Federal Reserve resumed.
The dollar erased its weekly loss against the pound, the euro and the franc but was not able to do so versus the yen. The greenback fared better against commodity currencies, rising on Monday and keeping its gains by the weekend.
EUR/USD sank 1.7 percent from 1.1377 to 1.1186 by the weekend after rising to the high of 1.1712 on Monday — the strongest rate since January 15. USD/JPY plunged from 121.87 to 116.16 (3.1 percent), the lowest since January 16, before bouncing to settle at 121.37. AUD/USD opened at 0.7298, touched the low of 0.7036 (the weakest level since April 2009) and closed at 0.7166.
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