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The use of currency markets to defend themselves from the turmoil in the stock market

After a long period of rises, the U.S. stock market and also because of the story especially Goldman Sachs , began what could be a correction.

This hypothesis is strengthened by some macro economic data below expectations, particularly the unemployment ever expanding, and one from the technical analysis sees several indicators that run warning signals ( rsi - stating that there is overbought, fibonacci , vix ).

recent periods of stock markets have demonstrated the utility of a small geographical and sectoral diversification , because when Wall Street drops also involves other stock markets that look to you to set the operation and actually end up amplify the trend, given the smaller size and consequent greater volatility.

For example, yesterday against a U.S. index falls S & P 500 1 .61%, our Ftse Mib left field on the 2.26%.

This raises the problem of finding ways to cushion the impact of these effects on the value of the portfolio , perhaps trying to increase the value as financial markets generate, in any situation, risks and opportunities.

do so for the defense of asset in which they committed the daily responsible trading in major banks as well as Hedge Fund .

A solution is represented use of the exchange channel, as some foreign currencies can be used as cover equity investments since their progress against the euro is inversely correlated with the stock market.

The main currencies in question are the Swiss franc, the dollar and the yen especially .

In fact, the Japanese currency, to always remain at odds yesterday, reported an increase of 1, 3% sul'euro. This, therefore, largely offset by the decrease of the bag.

Looking at the period of autumn 2008, the time of the collapse, we note that the ' appreciation of the yen was 30%, who therefore had time assets in that currency, mainly in bonds, could therefore defend brilliantly its portfolio.

A similar movement, although less violent, we can find in going the U.S. dollar, which tends too 'it to increase in value in times of increased risk perception by investors .