Haven behaviour check: what's actually working as a haven?
On paper: yen, franc, gold. In practice: sometimes none of them, sometimes all three. The haven labels are assigned by history and earned daily.
What are you seeing?
- which havens are behaving on risk-off days
- the risk-off day that behaved strangely
- how you adjust when havens don't cooperate
Background: safe-haven currencies.
Background: Safe-haven currencies: why the yen and Swiss franc rise in a crisis
When markets panic, money flows into a few currencies seen as safe. Why the yen, franc and dollar play that role, and when it breaks down.
Why is the yen a safe-haven currency?
Japan holds large foreign assets that tend to be brought home in a crisis, and the yen is widely borrowed to fund carry trades. Both lead to yen buying when markets fall.
What is a risk-off move?
A shift away from risky assets such as stocks and higher-yielding currencies, towards perceived safe havens such as the yen, Swiss franc, dollar and gold.
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