How would a big stock market crash impact forex? : Forex

How would a big stock market crash impact forex? : Forex


In all sorts of ways depending on what breaks and what country. The money that gets pulled out of equities needs to go somewhere and probably because the person that pulled it out found a better place for their money or are worried to lose it and stick it in another currency. If you look at what happend to the currencies during major crashes like that of 2008 you will see all stock markets pretty much went down but you can see which currencies strengthen because of that dip and which currencies fell.

Just look how strong the JPY got after 2008, it crushed pretty much everything. Even though the nikkei also tanked. Gold went to the moon and people were desperately looking for havens to hedge against crazy inflation.

Remember currency is the life blood of everyone and every business and equities are a strong force in our economy, what ever stocks do the currency will react because the money starts to zip around.

It’s a LOT deeper than that, and macro-economics is not an easy beast to understand. So these are huge over simplifications.



Source link

Facebook Comments

Leave a Reply

Your email address will not be published. Required fields are marked *