The dollar and yen are sitting well firmer across the board as equities
Equities
Equities can be defined as stocks or
The dollar and yen are sitting well firmer across the board as equities
Equities
Equities can be defined as stocks or shares in a company that investors can buy or sell. For example, when you buy a stock, you are purchasing equity, thereby becoming a partial owner of shares in a specific company or fund.Equities do not pay a fixed interest rate, and as such are not considered guaranteed income. Consequently, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling partial ownership in the company.Equities have become a popular form of investing. Despite their risk, there are many reasons for individuals investing in equities. Equity holders can also benefit through dividends, as these differ notably from capital gains or price differences in stocks you have purchased.Dividends reflect periodic payments made from a company to its shareholders. They’re taxed like long-term capital gains, which vary by country. Why are Equities so Popular?In the United States and many developed countries, equity markets are amongst the largest in terms of transactions, investors, and turnover, adding to their growing popularity in recent decades.The appeal of equities is the potential for high returns. Most portfolios feature some portion of equity exposure for growth, which as mentioned also carries a larger degree of risk.Equities are also popular with younger investors who can largely afford to take on higher levels of equity exposure, i.e. risk. As such, these individuals have more stocks in their portfolio because of their potential for returns over time. However, individuals looking to retire or rely on a more stabilized and risk-averse portfolio often reduce their equity exposure.This stance is hardly novel and can explain trading habits among many investors. For example, holders of retirement accounts typically will shift at least a portion of their investments from stocks to bonds or fixed-income as they get older.
Equities can be defined as stocks or shares in a company that investors can buy or sell. For example, when you buy a stock, you are purchasing equity, thereby becoming a partial owner of shares in a specific company or fund.Equities do not pay a fixed interest rate, and as such are not considered guaranteed income. Consequently, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling partial ownership in the company.Equities have become a popular form of investing. Despite their risk, there are many reasons for individuals investing in equities. Equity holders can also benefit through dividends, as these differ notably from capital gains or price differences in stocks you have purchased.Dividends reflect periodic payments made from a company to its shareholders. They’re taxed like long-term capital gains, which vary by country. Why are Equities so Popular?In the United States and many developed countries, equity markets are amongst the largest in terms of transactions, investors, and turnover, adding to their growing popularity in recent decades.The appeal of equities is the potential for high returns. Most portfolios feature some portion of equity exposure for growth, which as mentioned also carries a larger degree of risk.Equities are also popular with younger investors who can largely afford to take on higher levels of equity exposure, i.e. risk. As such, these individuals have more stocks in their portfolio because of their potential for returns over time. However, individuals looking to retire or rely on a more stabilized and risk-averse portfolio often reduce their equity exposure.This stance is hardly novel and can explain trading habits among many investors. For example, holders of retirement accounts typically will shift at least a portion of their investments from stocks to bonds or fixed-income as they get older. Read this Term get shoved lower and bonds are bid. Commodities are mostly lower as well with cryptocurrencies also in turmoil. It’s shaping up to be a classic risk-off session in Europe today.
EUR/USD is now down over 0.5% to 1.0445 to its lowest January 2017, with eyes set on the 1.0400 level:
Meanwhile, the antipodeans are bearing the brunt of the risk-off mood in markets with AUD/USD down 0.8% to 0.6880 levels as pointed out here. GBP/USD also made fresh lows since May 2020 and is down 0.5% to 1.2190 at the moment.
The dollar is bid across the board but only losing out to the Japanese yen, with USD/JPY briefly dipping below 129.00. The pair is still down 0.7% on the day at around 129.10 currently. That comes as bond yields continue to fall, down a fourth straight day for the first time this year.
In short, the dollar rally looks to stretch further with new horizons being focused upon.
EUR/USD is setting course towards the December 2016 and January 2017 lows around 1.0340-52, with 1.0400 the key level to watch on the weekly chart. GBP/USD is stumbling its way towards 1.2000 and AUD/USD is solidifying a break below 0.7000 to its 50.0 Fib retracement level of the pandemic swing higher @ 0.6757.
It’s tough to fight the recent momentum and even more so when the technicals are continuing to favour the greenback for now.