Forex Risk Aversion

Risk Aversion is an important concept for traders that can have a significant impact on global markets including the currency market. To help traders to measure the risk aversion level in FX, we have developed Forex Risk Aversion tool showing the risk-on / risk-off sentiments.

Risk Aversion is measured on the basis of correlations between safe-haven currencies (USD, JPY, CHF) vs risky currencies (AUD, NZD, CAD) on 4 different timeframes - 1 hour, 4 hours, 8 hours and 1 day. Each timeframe can be viewed independently, while the the average of all four timeframes is a shown as the total risk level.

A higher risk aversion provides support to safe-haven currencies, while a lower risk aversion boosts high-beta currencies.