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 Risk aversion in forex

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imagine_raza



Posts : 99
Join date : 2010-07-18

PostSubject: Risk aversion in forex   Mon Jul 19, 2010 8:19 pm

Risk aversion in the forex is a kind of trading behavior exhibited by the foreign exchange market when a potentially adverse event happens which may affect market conditions.

This behavior is caused when risk averse traders liquidate their positions in risky assets and shift the funds to less risky assets due to uncertainty.[23]

In the context of the forex market, traders liquidate their positions in various currencies to take up positions in safe haven currencies, such as the US Dollar.[24]

Sometimes the choice of a safe haven currency is more of a choice based on prevailing sentiments rather than one of economic statistics.

An example would be the Financial Crisis of 2008. The value of equities across world fell while the US Dollar strengthened.( See Fig.1 ) This happened despite the strong focus of the crisis in the USA
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sadiaali



Posts : 109
Join date : 2012-01-17
Location : Karachi,Pakistan

PostSubject: Re: Risk aversion in forex   Wed Jan 18, 2012 10:41 pm

it is good information about trade.keep share with us like these informative things. so kind of you to read this thread.
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