Tag: risk off

Difference between Risk and Safe Haven Currencies

Trading Articles
When reading the daily forex updates one of the most commonly used terms are safe haven currencies and risk currencies. This is nothing but a distinction on whether a currency is considered to be risky or safe, thus the terms are used for reference. The terms safe haven and risk currencies in fact have nothing to do with how safe the value of the currency is. The terms are only used as reference in a way how a currency reacts to the markets. There is a distinction between the risk v/s safe currencies and it is important to understand this fact. When a currency pair is considered to be risky or safe is determined by how it co-relates to other assets. To illustrate, when risky assets increase it is always best to buy. Similarly when risk prone assets fall, it is better to sell such pai...