Forex Rapid RebateForex Rapid Rebate

Dollar Smile Theory

Have you guys ever wondered why the Forex Rapid Rebate strengthens rebateforexfee both recessions rebateforexbroker booms? Have you ever wondered? In fact, a clever person who worked at Morgan Stanley came up with a theory to explain ForexRapidRebate phenomenon Today, I will talk to you about this theory StephenJen, a former currency strategy analyst and economist, came up with a theory and named it the dollar cashback forex theory His theory depicts 3 scenarios that guide the behavior of the dollar Below is a simple illustration to illustrate that rebateforex image of a smile The following is a small explanation of this lovely smile  Scenario 1: The dollar appreciates due to risk aversion The first part of the smile shows that the dollar benefits from risk aversion Risk aversion causes investors to flee to safe haven currencies, such as the dollar and the yen Since investors believe that the global economic situation is unstable, they hesitate They are hesitant to continue to chase risky assets and are more willing to buy less risky dollars, regardless of the state of the U.S. economy, so the dollar still wins in risk Scenario 2: The dollar drops to new lows The bottom of the smiley reflects the dull performance of the dollar, which is due to the weakness of the U.S. economic fundamentals The possibility of a rate cut would also devalue the dollar, which would cause the market to start Avoiding the dollar about the dollar, their motto becomes Sell! Sell! Sell!  Scenario 3: The dollar appreciates due to economic growth Eventually, smiles are shown as the U.S. economy finally sees a ray of hope Optimism rises, economic turnaround signals emerge, and investor confidence in the dollar begins to rise In other words, as the U.S. economy enjoys a stronger GDP growth rate, and interest rate hikes are expected to grow, the dollar begins to appreciate When When the financial crisis emerged in 2007, this theory looked to have begun to work Remember, the dollar strengthened sharply as the extent of the global recession peaked? This was the first stage of the smile theory When the market finally came out of the bottom in March 2009, all of a sudden, investors began to switch to higher-yielding currencies, which gave the dollar the distinction of being the worst performing currency in 2009  So does the dollar smile theory hold true? Time will prove everything Anyway, this is a theory to keep in mind Remember, the economy is cyclical The key is to find a good economic position in the cycle The above is the smile theory, do you understand it? Are you smiling today?  Contact SY-Tech: (with WeChat) Email: [email protected]: SY-admin

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