Risk aversion refers to when traders unload their positions in higher-yielding assets and move their funds in favor of safe-haven currencies. This normally happens in times of uncertainty and high volatility, a so-called “risk-off” environment. In turn, periods of perceived low financial risk encourage investors to take risk, therefore creating a “risk-on” situation. The following instruments are excellent barometers of market sentiment that can indicate higher or lower risk taking depending on their performance.