Asian currencies set to rise on increased risk appetite
The forex trading forecast for Asian currencies is looking up, now that there is an expectation of dollar weakness. While the greenback is up today in currency trading, the forex trading forecast isn’t nearly so positive.
Risk appetite is making a return to the currency market. Not only does risk appetite help the carry trade, but it also helps emerging market currencies. Right now, Asian currencies are expected to see a rather rapid rise in the future. Bloomberg illustrates this point using the South Korean won:
“What’s behind the rapid gain in the won is the global dollar weakness,” said Jeff Kim, a currency dealer with Korea Exchange Bank in Seoul. “As the won fell at the fastest pace, it’s rising at that speed now.”
Even so, forex trading remains volatile, and care should be taken with regard to the currency market. It is possible that the risk appetite is quickly replaced by risk aversion, and that could result in a complete reversal of currently expected forex trading trends.
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