Forget the USD/JPY. An investor trying to gauge risk appetite in currency markets should look at NZD/JPY, writes Bloomberg strategist Masaki Kondo.
NZD/JPY holds a 5-year correlation of 0.70 with MSCI ACWI Index, the highest among all yen crosses against G-10 currencies.
NZD/JPY falls as much as 0.9% to 77.09 Tuesday, breaking below 200-DMA for first time since Nov. 9.
NZD/JPY is also the most strongly correlated with VIX among G-10 yen crosses at a coefficient of -0.57
These suggest rising global or regional equities tend to coincide with a stronger kiwi dollar against yen.
MSCI ACWI Index covers both emerging and developed stock markets.
Bloomberg
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.