Safe-haven rotation: how do you trade risk shocks?
When fear spikes, money flows yen-ward and franc-ward and out of high-beta pairs. Trading the rotation means being early, small and nimble — the flows reverse as fast as they arrive.
What's your risk-shock playbook?
- the pairs you use to express haven demand
- how you size and time entries during a shock
- the shock that behaved differently from the textbook
The safe-haven guide explains the flows and their limits.
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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