Risk Aversion returns – rescue plan not clear enough

Treasury Secretary Geithner’s speech yesterday contained a lot of big promises, but it was short of specific details.
The market was expecting something very clear, a course of action which will be both logical and stimulating, but Geithner failed to supply a good enough reason for investors to become moderated in present time.
In other words, the market did not get what it expected to get – and when the market does not get a good stimulus it expected to get, it goes down.

That’s what happened yesterday- stocks fell as a response to the speech, and a chain reaction of traders buying the Yen and the dollar against major currencies began.
For us – the Forex traders – this means another cycle of risk aversion is here.

For now – safe haven currencies are clearly back in demand!

Z.Georgi

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