1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

Chapter 27, Part II. Dollar Index – continued… Page 3

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 26, 2013.

Thread Status:
Not open for further replies.
  1. Sive Morten

    Sive Morten Special Consultant to the FPA

    Joined:
    Aug 28, 2009
    Messages:
    11,355
    Likes Received:
    14,503
    Commander in Pips: Thanks, but theory is quite serious and you’ve understand it quite right. Let’s pass through it again:

    Phase 1 – Risk aversion boost

    Economy starts to show the first warning signs of potential serious problems. Investors become worried and with that start to move their assets into safe-haven currencies. Initially it develops slowly but then faster and faster. In a row with USD – CHF and JPY also could start to rise. Since they think that the current situation in the economy is unstable or even on the edge – they prefer to get return “of investments” at all, rather than to get return “on the investments”. Durung such stages of the economy, the major task is to save what you have, rather than to earn more. Due to thess reasons the dollar starts to appreciate and it rate is growing.

    Phase 2 – Weak economy of recession

    When the rush gradually calms down, the economy gives clear signals of slowdown or even recession, The Fed starts to decrease interest rates, the dollar starts to fall. Demand for the greenback is weak.

    [​IMG]
     
Thread Status:
Not open for further replies.

Share This Page