In times of geopolitical turmoil or war, investors often seek refuge in currencies perceived as safe havens. several currencies are considered safe harbors due to their stability, liquidity, and low risk of depreciation. Some of the notable safe-haven currencies include:
1-US Dollar (USD): The US dollar is often regarded as the ultimate safe-haven currency due to the size and stability of the US economy, as well as the liquidity of USD-denominated assets. During times of uncertainty, investors tend to flock to the USD, driving up its value.
2-Swiss Franc (CHF): Switzerland's reputation for political neutrality and its strong banking system make the Swiss Franc a popular safe-haven currency. Investors view the CHF as a stable and reliable asset during periods of geopolitical tension.
3-Japanese Yen (JPY): The Japanese Yen is considered a safe-haven currency due to Japan's status as a net creditor nation and its large current account surplus. During times of crisis, investors often repatriate funds into the JPY, driving up its value.
4-Euro (EUR): Despite occasional uncertainties surrounding the Eurozone, the Euro is still considered a safe-haven currency by many investors. The Euro's status as the second most traded currency in the world and the stability of major Eurozone economies contribute to its safe-haven appeal.
5-Gold-Backed Currencies: Some countries, particularly those with significant gold reserves, may issue currencies backed by gold or pegged to the price of gold. These currencies offer stability and are perceived as safe havens during times of crisis.
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JoeChampion
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@TradingView, Thank you! happy to be a part of the community
panickyBus94558
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The Swiss is no longer neutral and may be negatively effected more than usual from the war Europe is facing with Russia…. Then yen is soft right now but lots of their companies (like toyota) get paid in USD, Euros, etc so I’m not surprised with it being on the list… even with their aging population and ballooning rates (first time above zero….maybe in my lifetime? Lol)
panickyBus94558
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@panickyBus94558 I don’t disagree with the list; just pointing out factors that may weigh in… first things that come to mind that may make things different in the current climate
BafS
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What are you talking about, Switzerland is still neutral
michelletinalouie
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Great post Joe! Thank you!
JoeChampion
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Traders often perceive gold and the dollar to have a negative correlation, meaning that when one rises, the other tends to fall, and vice versa. However, during times of uncertainty, these two assets may exhibit a surprising trend: a positive correlation. This unexpected alignment occurs because both gold and the dollar are sought after as safe-haven investments in times of geopolitical instability or economic uncertainty. Consequently, when market jitters intensify, investors flock to both gold and the dollar, driving up their prices simultaneously. This phenomenon underscores the unique role that gold and the dollar play as safe havens during turbulent times, challenging conventional assumptions about their relationship.
ChampGoesCrazy
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There is no way the Euro is a safe haven currency😂
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