Forex Strategy Video: Is the US Dollar Still a Safe Haven?
• Despite a strong bearish break for equities, the dollar suffered declines against most of its crosses
• The response to the sentiment slump was substantially different between currencies and markets
• Emerging markets were the hardest hit asset classes and the yen crosses the worst hit currency pairs
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The S&P 500 broke lower from tight congestion, the yen crosses dove and volatility levels increased. By most accounts risk aversion has kicked in. So, then why did the dollar drop? There has been a growing argument within the trading ranks that the world's reserve currency is losing its appeal as a go-to safe haven during periods of risk aversion. Yet, the issue may not be the greenback at all. Rather, it may be a reflection of risk trends. Supporting that theory, we have a varied performance from the market's usual suspects for connection to sentiment changes. We talk about the dollar's safe haven status and the market's recent risk slide in today's Strategy Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.