Talking Forex
Swiss Franc
The Norwegian Kroner as a safe haven?
Post the Swiss National Bank pegging the CHF to the EUR, with a minimum exchange rate of CHF1.20, forex traders have been scurrying to find a new safe haven, and some have been turning to the Norwegian Kroner (NOK). Norway has a strong fiscal position with a positive account surplus, a fiscal surplus and a … Continue reading
Correlating currencies – the EUR and CHF
The EUR/USD and USD/CHF have a nearly perfect inverse correlation, often over 90%. That means that, 90% of the time, when one forex pair rises the other will fall and vice versa. The foundation of the relationship Over a 12-month period, most currencies that trade against the US dollar have a correlation of above 50%. … Continue reading
Use government intervention in your forex trading
Valuing currencies The forex market revolves around the value of currencies in relation to the values of other currencies. These values play a large economic role, especially in the prices of imports and exports. Currencies are either valuated by the market, or by governments. In the market, the value of assets is determined by supply … Continue reading
Intervention risk in the forex market
The past few months have been a volatile time for the markets, and forex, usually the most liquid of them all, has been no exception. Considering the US debt ceiling announcement, S&Ps downgrading US debt from AAA to AA+ and the US and Europe’s respective debt crises, this isn’t surprising. However, another element has been … Continue reading
Forex features – safe haven currencies – the USD
Why is the USD a safe haven currency? The US economy is in much worse shape than that of the CHF, another safe-haven currency. In theory, a safe-haven currency should also be resilient to global economic problems, which the US is not, a result of having major trading partners across a number of continents. However, … Continue reading
Forex features – safe haven currencies – the CHF
The CHF is considered to be a safe-haven currency for a number of reasons, including economic fundamentals, a lack of competition and liquidity. Economic fundamentals Switzerland has a strong economy with low inflation, low unemployment and conservative and transparent monetary policy. Its business environment is also highly competitive, along with low corporate tax. Swiss exports … Continue reading
Safe haven currencies
What is a safe haven currency? A safe haven currency is a currency that is considered to be safe during geopolitical and economic turmoil. Consequently, when events like natural disasters, war and stock market crashes occur, currency traders invest in safe havens, causing the value of the safe haven currency to rise and the value … Continue reading
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