The Tell: Here’s the new risk proxy for FX traders — and it isn’t the currency you’d expect

When investors duck for cover in times of market turmoil or dial-up their risk appetite when things are rosy, there is a new currency of choice — and it isn’t the one you’d expect.

According to RBC Capital Markets, the leading risk proxy for G-10 currencies is the Norwegian krone USDNOK, -0.5767% In a research note to clients, Elsa Lignos, global head of FX strategy at RBC, said the Scandinavian currency has knocked off the Australian dollar AUDUSD, +0.2429% as the go-to unit for those tracking risk sentiment.

Risk-proxy trades are those that reflect market and economic sentiment.

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