Hello,
Just planning my trades for the next few months. Looking at events like the 2008 crash and 2020 covid crash and how they spiked the different currency pairs.
The recession we are likely heading into doesn’t feel quite the same as there may not be one dramatic crash, it’s more like there is going to be a grind downward.
Does anyone have any thoughts on this? Does a recession necessarily mean a dramatic move in the currency market?
Thanks:)
It could if global inflation spirals out of control especially the US, Europe and Asian countries. The Russian war on Ukraine and possibly a Chinese war on Taiwan are just a couple of examples.
True there could be big events that trigger a crash in an already weak sauce market. But what I want to know is if a recession necessarily means that the USD will spike upwards. I mean, the US has higher inflation that most other western countries right now, I don’t see why people would flock to it like they do in a dramatic crash?
The stock markets could fall, but the currency pairs trading are either strong or weak. Japan economy is weak, hence USD/JPY is a buying opportunity. When there were media reports that Japan kept under 2% inflation, the currency pair turned the tables for a while as a USD/JPY selling opportunity. .