‘Risk On-Risk Off’ Key to Currency Markets for Months, HSBC Says
This article is for subscribers only.
Correlations between currencies and other asset classes will remain high during the current financial crisis and may never return to levels seen in the mid-2000s, according to HSBC Holdings Plc.
“A weakening of the ‘risk on-risk off’ paradigm is likely only once macro conditions are improved in a sustainable way, implying the paradigm will continue to dominate the market for some considerable time,” currency strategists led by David Bloom in London wrote in a research report yesterday.