The euro and British pound both edged lower on Wednesday, and while all the European economic data in the world argues in favor of weakness for the two currencies, the price action we’ve been seeing lately has had more to do with the very broad trend of flight-to-quality into “safe-havens” like the US dollar.

The US dollar pulled back sharply on Tuesday, especially against the high-yielding commodity dollars, amidst a pickup in demand for carry and an improvement in investor sentiment.

The US dollar gained against currencies like the euro and British pound amidst a more than 5 percent drop in oil.

The Federal Reserve remains likely to cut rates down to record lows before year-end, as indicated by Fed Fund Futures, which are fully pricing in a 25bp cut on December 16 and a 55 percent chance of a 50bp cut.

The US dollar gained throughout most of the day on Thursday as the currency rebounded from critical support and despite the release of US economic data that added to evidence that the nation is facing recession.

The US dollar strengthened for much of the morning, only to plunge at the end of the day as a nearly 11 percent surge in US stock markets drained demand for safe-haven assets.

Will weak US consumer confidence finally cool the rally?

The US dollar and Treasuries surged on Friday as deleveraging led funds to flow away from stocks, commodities, and carry trades into safe-haven assets.

The US dollar story wasn’t much different than it has been for the past few weeks, as lingering risk aversion led the currency higher.