Resolved Question
Risk aversion came yesterday, why?
any conclusion why risk aversion came back? thx
over 2 years ago
Best Answer - Chosen by Voters
The dollar has been the main focus over the past few weeks and the US currency vulnerabilities are well known. But over the next few weeks, there is likely to be an increased focus on the Euro-zone economy. Fears over the structural vulnerabilities are liable to increase and this could expose the euro to important selling pressure, especially if there is a wider increase in global risk aversion.
Keep your eye on EUR/JPY. It acts as a proxy on the equity markets. If there is a sustained downturn in equity markets, then risk aversion will return in full force and a dollar rally will happen. Everyone and their mamas are short the dollar right now. So be careful.
Pay attention US economic data especially employment (unemployment claims, NFP) and housing data, as well as company earnings.
over 2 years ago
Answers (2)
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Risk aversion was probably triggered last Friday when US President Obama warned of a double-dip recession for the US, considering how its rising debt could put a downward pressure on economic growth.
over 2 years ago
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