While volatility racked the markets, currency exchange traded funds that track safe-haven currencies like the euro, Japanese yen and Swiss franc strengthened.
On Friday, the CurrencyShares Euro Currency Trust (NYSEArca: FXE) was up 0.4%, CurrencyShares Japanese Yen Trust (NYSEArca: FXY) gained 0.9% and CurrencyShares Swiss Franc Trust (NYSEArca: FXF) was 0.9% higher. FXY has been among the better performing currencies, rising 2.5% over the past month.
Meanwhile, the PowerShares DB U.S. Dollar Index Bullish Fund (NYSEArca: UUP) dipped 0.2% Monday. UUP tracks the price movement of the U.S. dollar against a basket of currencies, including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc.
As U.S. markets plunged, with major benchmarks off 3% mid-Friday, traders turned to safe-haven currencies. For instance, the euro gained 0.4% against the dollar, strengthening to $1.0911. The dollar weakened against to yen by 0.9% to ¥117.01. Additionally, the greenback dipped 0.3% against the Swiss franc to CHF1.0021.
Among the major developed foreign currencies, the Japanese yen has been a standout in the forex markets, rising 3% against the USD this year, reports Stephanie Yang for CNBC.
“We believe the market turmoil isn’t over, and therefore the yen is going to continue to rise,” Kathy Lien of BK Asset Management told CNBC.