Just eight or nine years ago, currencies were the hot-ticket item in the investment world. That was when central bank easy-money policies helped investors realize (and exploit) the interconnectedness of global economies and financial markets.
It was also pretty easy to bet against the U.S. dollar, too.
But then the financial crisis hit.
Then the greenback became the recipient of safe-haven capital flows. At the same time, emerging-market currencies, commodity dollars and the more-popular-than-ever euro were hung out to dry.
Just like that, the currency game got real.
Investors Cash out of the Currency Game
Newbies hadn’t realized the intricacies of the foreign exchange market. Their orientation was made painful by the financial crisis, and investors quickly lost their appetite for currency investments.