Euro/Japanese Yen as a Risk Indicator
For U.S. markets, EUROYEN TIBOR trades in the money markets on the CME. Research suggests that euro/Japanese yen is the only pair of this type ever traded directly in the money markets. Many currency pairs trade as futures contracts on the CME, but none trade directly in the money markets. Because U.S. money markets are so sensitive due to the short-term nature of many varied rates and varied financial instruments, euro/Japanese yen is classified as a market-risk indicator by market convention.
euro/Japanese yen as a risk indicator measures risk for carry trades and provides overall direction for all other currency pairs because of direct opposite correlations of this pair. When risk grips the markets, euro/Japanese ...
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