Risk-on describes times when traders feel confident and buy higher-yielding, riskier currencies; risk-off is when fear drives them into safe havens like the US dollar, yen, or franc. This mood shift moves whole groups of currencies together and is a key backdrop for forex.
Forex Term
Risk-On / Risk-Off
The market’s swing between seeking risk and seeking safety.
Example
In a risk-off panic, traders sell higher-yield currencies and buy the safe-haven yen.
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Risk
Forex and CFD trading involves significant risk of loss and is not suitable for all investors. Leverage can work against you. This content is educational and not financial advice — always do your own research.