Forex Blog: Currency Trading News & Analysis.

November 19th 2008

FX Correlations Surge on Risk Aversion

Since the credit crisis heated up several months ago, the theme of risk aversion has predominated in equity markets. This is also true in forex markets, where deleveraging and a shift to perceived investing "safe havens" has led to a collapse in the carry trade, leading to a sharp rally in both the Dollar and Yen. In fact, the recent rise of these two currencies has coincided remarkably with stiff declines in the prices of virtually every class of risky asset.

Read More: Currency Trading Markets Remain Highly Correlated to Dow Jones, Crude Oil Prices

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Posted by Adam Kritzer | in Investing & Trading, US Dollar | No Comments »

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