Forex Blog: Currency Trading News & Analysis.

July 2nd 2008

Yen Back in Vogue

Volatility, the perennial enemy of the carry trade, has returned with a vengeance. The US stock market, a proxy for global risk appetite, has fallen significantly (nearly 20%) over the last six months, a trend that has accelerated over the last two weeks. By no coincidence, the Japanese Yen and Swiss Franc have rallied dramatically over the same time period. On one hand, currency trading is seemingly becoming more cut-and-dried, as correlations strengthen between different sectors of the global capital markets and specific currencies. The respective inverse relationships between the Dollar and oil, and between the Yen and US stocks, have been particularly strong of late. In the end, though, it is anyone’s best guess whether the price of oil will continue to rise and stocks will continue to fall. Reuters reports:

"We’re back on the brink," said one analyst. "It seems there is a feeling of resignation and helplessness amid this credit crisis."

Read More: Yen and Swiss franc gain as risk appetite fades

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Posted by Adam Kritzer | in Investing & Trading, Japanese Yen | No Comments »

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© 2004 - 2023 Forex Currency charts © their sources. While we aim to analyze and try to forceast the forex markets, none of what we publish should be taken as personalized investment advice. Forex exchange rates depend on many factors like monetary policy, currency inflation, and geo-political risks that may not be forseen. Forex trading & investing involves a significant risk of loss.