Rebound in European Shares Eases Risk Aversion Fears
On Friday (Nov. 7th) the dollar slipped against other major currencies as a rebound in European share prices eased risk aversion fears. Many investors took advantage of Forex opportunities and sold off dollars and the low-yielding yen and bought into riskier currencies, including higher-yielding currencies such as the Euro and the Pound.
Signs Of a Recession
European data released Friday pointed to a prolonged global economic slowdown which will make investors wary of taking risks. German industrial production fell to a 14 year low and figures from the US are expected to show signs of a deepening recession. Investors usually flock to the dollar in times of trouble and these fears are in part responsible for the dollars surprising performance on Forex markets.
Dollar Still Safe Haven
Analysts believe that weak figures from the US will only confirm what many already believe, that the US economy is rapidly deteriorating. Because of the risk to the global economy U.S. currency may ultimately gain because of the belief that a struggling US economy may pose greater risks to the global economy. Forex traders and investors are taking advantage of the safe haven that the dollar offers.
Fears of a global recession are fueling risk aversion and sending investors flocking to the US dollar. Despite the fact that the US has shed 240,000 non farm jobs in the third quarter and other negative indicators the dollar continues it’s levitating act.
Forex Opportunities Continue With Dollar
As long as the world’s economy continues to deteriorate the dollar will continue to offer Forex opportunities for both Forex traders and investors. While right now the dollar is seen mainly as a safe haven currency markets continue to outperform stock markets providing plenty of Forex opportunity globally.
