emergency
Unexpected events, as the name implies, are unexpected things that happen suddenly, including political, military, economic and even social aspects. When they happen, they will bring panic to investors, have a certain impact on the domestic currency, and cause financial market turmoil in a country.
For example, once a major oil pipeline in Iraq broke, which greatly hindered the production and export of crude oil in the country and raised the price of crude oil in the international market from $27 to $29. As we all know, the United States is a country on wheels, and crude oil is closely linked with the United States. It goes without saying that the dollar has fallen by dozens of basis points.
There are also examples that happen around us. I believe everyone is familiar with the monthly non-agricultural employment figures released by the United States. Although many economic data will be predicted in detail before publication, due to technical reasons, there is a big gap between the published value and the predicted value in most cases, which has become an "emergency".
However, the foreign exchange market is more affected by major political emergencies than by economic indicators. Because foreign exchange, as an asset with international liquidity, will face greater risks than other assets under the turbulent political situation; The rapid flow of the foreign exchange market further makes the fluctuation of the foreign exchange market more intense when the political situation is turbulent. The specific forms mainly include general elections, wars, coups, border conflicts, domestic unrest and so on.
Take the American "9 1 1" incident as an example:
9 1 1 incident was the first serious terrorist attack in the United States. Take the euro as an example. Before 9. 1 1 occurred on that day, the euro hovered around 0.896 against the US dollar, and rose nearly 200 points in just a few minutes after the explosion, reaching the highest of 0.9 169, and also stopped at 0 at the close.
9 1 1 happened during the American economic recession. This incredible event not only made the dollar plunge sharply in a short time, but also made the American economy, which was already in a trough, suffer a greater impact. The most important thing is that investors are pessimistic about the US economy, the confidence of the US dollar has been hit hard, and the safety of US dollar assets has been seriously questioned.
When unexpected events happen for unknown reasons, investors are often caught off guard, disrupt their plans, don't know what to do next, and often make worse plans, which is also a reason why the market often "overreacts".
In the face of emergencies, we should start from the following two aspects and face them positively.
1. In the face of huge market shocks, investors should remain calm in the face of the crisis. In the case of not accurately judging the market, it is best to think about how to solve your own crisis, reduce losses, avoid risks and protect yourself.
2. After you can make a rational analysis, you should start to trace back to the source, find out the essential reason of the market change, what is the significance of this event, judge the future trend and predict the trend of the foreign exchange market.
There is an old saying in China called "Seeking wealth while taking risks". For some people, this sudden market is full of huge risks, but for investors who are eager for excitement and can analyze rationally, this moment is also full of considerable profits.
However, when an emergency happens, the most important thing for investors is to guard against the risks it may bring to themselves, because the market has changed greatly after the emergency.
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