Risk Rally Ending for Currencies Turns Focus to Least Ugly

The best-performing currencies of 2011 are falling out of favor as the Federal Reserve plans its exit from record monetary stimulus just as the global economy shows signs of slowing, buffeting commodities and stocks.

A basket of nine currencies including Australia’s dollar and the Norwegian krone has dropped 4.2 percent in May against the U.S. dollar, after rising 7.3 percent in the first four months of 2011, according to data compiled by Bloomberg. Demand for contracts insuring against a drop in the euro versus the greenback are trading at about the highest levels of 2011.