The past trading week has started with risk aversion and the same theme continued throughout the week with just short bouts of risk appetite. Unsurprisingly, the Japanese yen profited in such an environment from its perceived role as a haven currency.
Trading started with yet more bad news from China and the same theme dominated the market till the weekend. While the sentiment was showing signs of improvement once in a while, trading ended with just more negativity for the market. In fact, experts say that it was the worst start of the year for global stocks in history.
As one could expect, the yen thrived in the risk-adverse environment. The US dollar was also strong against most currencies, though it suffered from the bunch of negative macroeconomic reports released from the United States. Commodity currencies were in rout, especially the Canadian dollar that suffered from falling oil prices and speculation about a potential interest rate cut.
USD/JPY ticked down from 117.20 to 116.95 after rallying to 118.37 during the week. EUR/JPY slipped from 127.97 to 127.67. GBP/JPY dropped 2.3 percent from 170.24 to 166.66 — the lowest weekly close since November 2013. CAD/JPY tumbled 3.1 percent from 82.70 to 80.50 — the lowest close since November 2012.
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