Wall Street Ends Volatile Week Amid Fears Of A Currency Crisis

After two days of free fall and a sharp rebound, Wall Street finished flat on Friday to close the week at 16,643, just a tad above last Friday’s close at 16,459, NPR reported. Despite the recovery, the erratic movement that was exhibited on Wall Street this week is spurring talk of a looming currency crisis and giving way to concerns of an impending September rate hike.

“Contributing to the ups and downs were conflicting rumors about whether the Federal Reserve would raise interest rates next month. All of this caused big stock-price swings, often within the same hour.”

In fact, the entire month of August has been what the New York Post calls “brutally punishing” for investors, topped off by last week’s tumultuous swings on Wall Street, which were aggravated by thin volume all month that, in turn, produced the “unprecedented market volatility.” Just how volatile? Monday’s Wall Street opening saw the Dow Jones Industrial Average drop dramatically, losing more than 1,000 points, closing down a whopping 588 points that afternoon after hitting a low of 15,370 (compared to a 52-week high of 18,351 in May).

Then, stocks soared on Wall Street mid-week, rising more than 369 points to hit 16,654 and effectively pulled out of the first S&P 500 correction (a decline of 10 percent or more) to happen in almost four years, Christian Science Monitor reported. Analysts attributed the rally to “Bargain Hunting” as well as a new report that shows the U.S. economy is growing faster than expected.

China also played a major role in the week’s Wall Street scare, after news broke that manufacturing is slowing at a much faster rate than economists previously predicted. As the world’s second largest economy, if China’s economy actually does slow much more dramatically than previously expected, it would mean the nation as a whole will buy fewer commodities in the future. According to NPR, this would have a negative effect on markets like coal, copper, and iron ore, to name only a few, thereby slowing the entire global economy and dragging down a number of currencies.

So what’s the next big move coming on Wall Street? While nobody has a crystal ball, it’s safe to say that concerns surrounding issues like declining oil prices, China’s economy, and uncertainty over interest rates will continue to have an effect this September, which means the possibility of additional market volatility.

[Photo by John Moore / Staff / Getty Images]