Excerpt from: Forex News
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| May 04, 2010 | | Risk aversion rules forex market, though | The Reserve Bank of Australia hiked its interest rate again, continuing its aggressive attempts to stem the tide of inflation. Australia's economy gets regular boosts from China, though, and with China trying to slow things down, the RBA may put further hikes on hold.
Normally, such a move would be accompanied by some risk appetite on the forex market. This is not the case today. Equities in Europe and the U.S. are plunging on European debt concerns. In the U.S., the Dow is down more than 150 points.
Forex traders are concerned about debt, and, as a result, are fleeing to safety. The U.S. dollar, still consider the most stable of currencies is gaining as traders look for capital preservation and limit their exposure to riskier currencies and stock investments.
| Topic Tags: currencies, forex market, forex traders, RBA, risk aversion, U.S. dollar | |
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