Risk Sentiment Slips Lower

Date: June 8th2022

Risk aversion has been the key theme to trade this year. Recently there looked to be some relief in the markets, but the signs are there for this not to continue for long.

Dollar Edging Higher

In the foreign exchange market, the U.S Dollar is seen as a haven currency and is seen as generally risk averse. Therefore, this sort of environment could see the DXY index push higher.

In contrast, many analysts believe the markets are overpricing the recent political noise in the UK after U.K. Prime Minister Boris Johnson survived a vote of no confidence. Therefore, GBPUSD could be vulnerable to more downside after grabbing the liquidity at 1.26000.

Stocks Look Vulnerable

Meanwhile, the World Bank has lowered its global growth estimate to 2.9% from 4.1% for 2022. Its reasons were supply constraints, central bank tightening, and surging commodity prices. As a result, stocks all over the world look vulnerable to another leg lower. Generally, analysts believe any relief will be met with more selling pressure.

Everyone at Zenfinex hopes you are having a great trading week. If you would like to know more about the products we offer, feel free to visit www.zenfinex.com.

Disclaimer:  Trading Foreign Exchange is highly speculative and may not be suitable for all investors. The leverage created by trading on margin can work against you and losses can exceed your entire investment. Only invest with money you can afford to lose and ensure that you fully understand the risks involved.