Market Analysis

The financial markets are in risk aversion mode

FOREX

The financial markets are in risk aversion mode this morning, following losses across all major stock indices and words of caution from the Federal Reserve, warning about a slower than expected economic recovery. As a result, the Dollar Index has gained almost 0.8% over the last 24 hours with investors once again looking for the safety of the American currency. Seasoned operators have been taken by surprise, as a retail crowd using leveraged products placed big bets on dwindling shares, forcing prices up and generating unexpected losses for large traders that were short selling those same securities. Some hedge funds had to close positions in rising stocks, in order to cover losses, triggering a sentiment of unease and surprise that spread across the markets and resulted in the biggest daily loss of the last three months for the major stock indices.

Ricardo Evangelista – Senior Analyst, ActivTrades

 

Source: ActivTrader

 

 

The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.

All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of futures performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.