Risk appetite has returned as equity markets rallied for the fifth straight day. As usual, the return to risk appetite brought new forex investment opportunities for forex brokers. The Euro rose to $1.30, its highest in a month. The troubled British Pound also rose on Monday’s trading.

The rise of the Euro provided many forex brokers with forex opportunities that the currency has been unable to provide through most of the global recession. A group of G 20 finance ministers pledged to double the resources available to emerging markets which also raised investor sentiment. Currency markets are taking their cue from equity markets, raising risk sentiment, resulting in many forex investment opportunities. Dan Cook of IGM Markets stated, “The equity market gains are really feeding risk appetite. But while we’ve had a good run for a few days, there’s still not much good news, so we’re vulnerable to a reversal.”

Throughout the recession risk aversion has been dominant and safe haven buying has limited forex opportunity is the past. Despite the continuous stream of bad economic news some forex brokers remain upbeat and some believe that the recession is beginning to turn around. Fed Chairman Ben Bernanke said he expects the recession to continue for the rest of 2009. He also said that stabilization of the banking sector is essential before recovery can take place.

The Japanese Yen which has provided forex opportunity in the past is under pressure and Japanese economic data keeps getting worse. The Bank of Japan meets this week and is considering the purchase of long-dated government bonds. Forex brokers will be watching the Bank’s actions closely.

The last two weeks has seen a rise in investor risk sentiment and new forex opportunities. Many forex brokers advise caution and Dan Cook of IGM Markets states the obvious, “But while we’ve had a good run for a few days, there’s still not much good news, so we’re vulnerable to a reversal.”