- Turbulence returned to currency markets towards the end of last week after questions were asked about the stability of emerging market debt.
- It should have been a relatively quiet Friday with the US effectively on holiday from Thursday onwards for Thanksgiving. But the lack of US trade only exacerbated volatility on foreign exchanges after Dubai asked creditors of its Dubai World holding company for a six-month standstill on debt repayments.
- In response, investors dumped risky assets in a knee-jerk reaction to the news, which saw the single currency drop near two cents in early trading.
- However, the euro was able to recoup most of its losses as European stocks recovered from their sharp losses on Thursday.
- Despite the Dubai shock, the dollar also remained subdued in the wake of the minutes from the Federal Reserve's latest meeting which appeared to give traders the green light to sell the US currency.
- In trading this morning, dollar selling has resumed after the United Arab Emirates offered emergency assistance to banks in Dubai, soothing market fears about a looming debt default.
Monday, 30 November 2009
Volatility was high on Friday though the euro recovered to close the day near $1.50. It is climbing higher this morning
After a sharp sell-off, the euro recovered its poise to close the week just below $1.50, marginally down on the day against the US currency.
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