Forex: Dollar, Yen and USDJPY Reactions to Risk and US Debt Standoff
- The USDollar's rebound from 5-month lows fell flat and the S&P 500 closed on the verge of a breakdown
- Focus on the US budget and deficit impasse is distorting the relationship between risk trends
- The dollar is considered a safe haven, but the yen crosses may be better under certain scenarios
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When global investors are scrambling for safety-at-any-cost, the dollar is typically the target. But what happens in a US-borne debt crisis? If the catalyst to a shudder of panic is the US financial system itself, does the dollar retain its appeal as an option of last resort? Would the Japanese yen be a better option given its 'oversold' status and correlation to equity indexes? And, what about USDJPY as a gauge for safety? We discuss the unique threat we the market is counting down to and the trading impact it will have in today's video.
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