Forex Strategy Video: Is this a 'Risk On' Move for the Dollar, S&P 500?
- Both individual trades and whole markets are based on the level of risk against potential return
- A lack of intensity on this theme has resulted in an unusual dollar and S&P 500 relationship
- Recently the dollar and equities have reverted to this theme and it will intensify going forward
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A common question amongst traders is why has the safe haven dollar climbed over the past year alongside the riskier S&P 500? It is true that the two benchmarks are on the opposite sides of the 'Risk Spectrum', but sentiment must be engaged to actually see those character traits play out. The more extreme the fear or greed, the greater the flow of capital away or towards a liquidity provider or high-yield currency. In today's Strategy Video, we discuss 'Risk On vs Risk Off' with an eye to the relationship between the dollar and equities as well as next week's important FOMC rate decision.
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