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What’s up with all these risk-off forex flows these days?! Higher-yielders just can’t seem to catch a break while the safe-havens are staying supported. Here are some factors that are keeping risk aversion in play:

1. Weak economic data from China

weak chinese dataLast week’s data dump from China suggested that the world’s second largest economy is still struggling. Industrial production was much weaker than expected with a 7.2% year-over-year gain in November, lower than the projected 7.6% reading and the previous month’s 7.7% increase. Fixed asset investment, which is considered an early signal of economic activity, slipped from 15.9% year-to-date in October to 15.8% in November.

Aside from that, Chinese inflation data indicated that the country wasn’t immune to falling commodity prices. The annual CPI fell from 1.6% to 1.4% in November while producer prices marked a worse than expected 2.7% decline, hinting that inflationary pressures would continue to weaken.

2. Continuous slide in oil prices

A quick look at the crude oil charts suggests that major economies could expect more downward price pressures in the coming months, as oil reached record lows at less than $60 per barrel this week. As I’ve discussed in a previous article on why oil prices keep tumbling, the increased supply brought forth by the U.S. shale boom and the OPEC’s refusal to curb production are bound to keep any price gains in check.

With that, talks of deflation could pop up once more, potentially sparking another round of currency wars among central banks. It doesn’t help that several major economies, such as the euro zone and Japan, are facing bleak growth prospects that could further weigh on price levels.

3. Russian currency crisis?

With the Russian economy heavily-dependent on oil and energy, it’s no wonder that the rouble followed in the footsteps of oil when the commodity crashed to record lows this week. The Russian currency lost nearly 10% of its forex value to the dollar, prompting central bank authorities to panic and hike interest rates by a whopping 6.5% a few days back.

Officials had hoped that this aggressive monetary policy move would help stabilize the currency, but many were surprised that it failed to do so. Instead, it spread more panic in the financial markets, triggering a spike in Russian bond yields and a massive loss in value for banks exposed to these debt securities.

4. Snap elections in Greece

Last but certainly not least, the Greek political turmoil still looms like dark clouds on the horizon, as forex market participants await the outcome of the three-round polls. As I’ve mentioned in my article on Greece’s government troubles, this vote of confidence could determine whether or not the debt-ridden country would be able to receive more bailout funds.

While this doesn’t seem to be dragging the euro lower for now, the shared currency could feel the jitters if the decision comes down to the wire during the third round. After all, a victory by the radical Syriza Party could mean more uncertainty for Greece and its future in the euro zone. And let’s not get started on the potential spillover effects to European banks and neighboring countries!

For now, it looks like these forex factors are set to keep any risk rallies at bay, at least for the next few days or until the issues are resolved. Do you think these could prevent the Santa Claus Rally from coming to town this year?