The Great Debate UK
Risk trade yet to show signs of fatigue
-Jane Foley is research director at Forex.com. The opinions expressed are her own.-
A month or so ago, there was a lot of talk that risk appetite would be pared back over the coming months. This talk was built around relatively cautious expectations for economic growth in most of the G-10 next year.
These cautious projections still stand. However, it is interesting that the risk trade suffered only a brief decline following the shock rise in the U.S. unemployment rate to 10.2 percent and the surprisingly strong fall in the University of Michigan confidence index.
Comments this week from Fed Chairman Ben Bernanke warning about “headwinds” that still face the U.S. economy have led to some paring back of risk but with poor economic data unable to cause a reversal of the uptrend in equities it seems that the risk trade is yet to exhibit many signs of tiredness.
