When Trading During a Political Shock, Only Foreign Exchange Will Do
- Currency market is the most obvious, sensible market
- It provides 24-hour access, liquidity and narrow spreads
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Politics is everyone’s business. But if you have to trade in response to it, there’s only one vehicle that’s truly suited to the exercise. It’s the foreign-exchange market. And that’s true whatever your investing expertise.
For speculators, hedgers and every other class of market participant, when they see turmoil, they immediately think foreign exchange. It’s the most obvious and sensible vehicle to use to navigate uncertain events with unknowable time frames (see the U.S. dollar’s move Thursday on headlines tied to President Donald Trump). It’s why, with a soupcon of truth, it’s a market staffed by traders often characterized as cowboys who love a good shoot-out.