Safe-haven watch: what are haven flows doing right now?
Yen, franc and gold are the havens, and their behaviour tells you how much fear is in the system — or whether rate differences are overwhelming the haven logic.
Share:
- what you're seeing in JPY, CHF and gold
- whether havens are acting like havens
- the risk event driving the flows this week
Background: safe-haven currencies and risk-on risk-off.
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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