β#ForexChief #SafeHavenCurrency #CarryTrade #trading #forexschool #forexeducationβ
π΅ Safe haven currency: who, how, and from whom is hiding?β
β‘οΈ The slang "Safe haven currency" scares beginners, although this is the name for any asset to hedge risks in times of crisis or speculation.
β
It is simple: in a crisis; you withdraw capital from transactions with a problematic asset and invest in a more stable one. Where exactly to "hide" - we decide according to the situation: we follow the news, analyze inter-market relations and events.
β
Choose the currency of countries with stable economies and monetary policy, low-interest rates, and weak inflation. Historically, USD, CHF, and JPY are considered such, but they can also be gold, stocks, or commodity currencies - NZD, AUD, CAD, and NOK.
β
For example, while the market is stable, the demand for commodity currencies grows, but at the slightest threat, their investors leave. Thus, weak statistics on oil or gold strengthen the yen, and it grows even on negative data from Japan: capital from transactions in USD/JPY βfloats awayβ into AUD/JPY or CAD/JPY.
β
Carry trades are unpopular right now: interest rates for base currencies are almost equal, so it is difficult to find pairs with a profitable margin for trading. But large players use such schemes and also know how to quickly transfer any assets to USD and treasury securities.
β
So when choosing assets, you need to evaluate their reliability and not just profitability, because in times of stock market "stress" you will have to act quickly, and your refuge must be safe.
β
Profits to yβall!