JPY & USD safe currencies...really?

[STRTRADA]

Hey guys,

Been trading forex for a fair bit now...Just beginning to make some tidy profits...

But the main question I had was regarding the so called safe currencies..the JPY and USD...
I know that if bad news comes in on so called optimistic currencies such as the EUR...more people buy in to these safe currencies...

My question is over these past few weeks the USD has been dropping like a brick...does this mean that it is losing it's status as a safe currency...It certainly can't be the economic climate...could it? as the JPY is growing ever more stronger....
Do you guys feel USD is not a safe currency to buy in during these rough times...?

Regards

 

[GammaJammer]

more often than not whe the USD falls it is as a result of people being happy to take on risk in other currencies (risk seeking behaviour). Unfortunately for most people, what they fail to realise is that the factors affecting whether most market participants are broadly risk seeking or risk averse are pretty fickle, often changing many times during the course of a given week / month. So when the USD sells off, it more often than not means people are buying 'riskier' currencies. Which currencies depends on who they are and how risky they are prepared to be.

Thats a gross oversimplification of course, and it doesn't factor in any negative economic stories that are WHOLLY u.s.-centric (which might cause the greenback to sell off on risk aversion, probably in favour of either jpy or maybe eur and possibly even chf if the SNB will let it). But it works in broad terms.

Hope that helps

GJ

 

[STRTRADA]

more often than not whe the USD falls it is as a result of people being happy to take on risk in other currencies (risk seeking behaviour). Unfortunately for most people, what they fail to realise is that the factors affecting whether most market participants are broadly risk seeking or risk averse are pretty fickle, often changing many times during the course of a given week / month. So when the USD sells off, it more often than not means people are buying 'riskier' currencies. Which currencies depends on who they are and how risky they are prepared to be.

Thats a gross oversimplification of course, and it doesn't factor in any negative economic stories that are WHOLLY u.s.-centric (which might cause the greenback to sell off on risk aversion, probably in favour of either jpy or maybe eur and possibly even chf if the SNB will let it). But it works in broad terms.

Hope that helps

GJ

Well explained thanks GJ...

 

[GammaJammer]

No problem - and remember risk behaviour doesn't just affect FX - you need to be watching stocks (S+P 500 is a good rough proxy), commodities (gold, oil etc), interest rates as well. All this stuff is like a big net roped together - pull on one thread and something else feels a tug.

 

[STRTRADA]

Yeah I've been learning that the hard way....