{"id":63428,"date":"2014-11-10T09:01:02","date_gmt":"2014-11-10T14:01:02","guid":{"rendered":"http:\/\/countingpips.com\/?p=63428"},"modified":"2014-11-10T09:01:02","modified_gmt":"2014-11-10T14:01:02","slug":"what-the-new-breed-of-safe-haven-currencies-means","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/11\/what-the-new-breed-of-safe-haven-currencies-means\/","title":{"rendered":"What the new breed of safe haven currencies means"},"content":{"rendered":"<div id=\"inves-2870950172\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">November 10, 2014<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><p><em><strong>Alternative &#8216;safe haven&#8217; currencies seem to have retreated, with markets returning to traditional &#8216;safe haven&#8217; FX for the first time since the 2008 financial crisis<\/strong><\/em><\/p>\n<p><a href=\"http:\/\/uk.saxomarkets.com\/\" target=\"_blank\"><span style=\"text-decoration: underline;\"><strong>By SaxoMarkets<\/strong><\/span><\/a><\/p>\n<p>\u200bSince the beginning of the 2008 financial crisis that drew large Western economies into turmoil, investors sought more niche currencies such as the Canadian\u00a0and Australian dollars.\u00a0However, recent price action would suggest some return to normality in financial markets.<\/p>\n<p>Investors bought the US dollar in droves during\u00a0the last quarter &#8211; its surge of 7% represented its biggest quarterly rise since the same period in 2008. The gain lifted volatility and hit other dollar-denominated assets such as commodities, sending emerging market currencies tumbling.<\/p>\n<p>The trigger has been geopolitical and economic events: the referendum in Scotland, the continuing economic struggles in China and the Eurozone, the expectations of an imminent interest rate rise in the US, and heightened conflict between Russia and Ukraine and within the Middle East.<\/p>\n<p>The spike in currency volatility marked a reversal of trends in recent years, with investors returning to traditional \u2018safe\u00a0haven\u2019 currencies.<\/p><div id=\"inves-124119923\" class=\"inves-in-content inves-entity-placement\"><hr style=\"border: 1px solid #ddd;\">\r\n<div id=\"inpost_ads_header\">\r\n<p style=\"font-size:10px; float:left; color:#666;\">Free Reports:<\/p><\/div>\r\n<div id=\"inpost_ads\"> \r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/1ApBOV\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2018\/06\/graph_techs_PD.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t     <a href=\"https:\/\/goo.gl\/1ApBOV\"><b><u>Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p><br><br>\r\n<br>\r\n<br>\r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/f3RrHX\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2019\/01\/cot_pie_80.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t    <a href=\"https:\/\/goo.gl\/f3RrHX\"><b><u>Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p><br><br>\r\n<\/div>\r\n<hr style=\"border: 1px solid #ddd;\">\r\n<br><\/div>\n<p><b><strong>What determines a safe haven?<\/strong><\/b><\/p>\n<ul>\n<li>\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Market size and volume<\/li>\n<li>\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Stable interest rates<\/li>\n<li>\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Controlled inflation<\/li>\n<li>\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Robust balance sheets<\/li>\n<li>\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Strong foreign investment positions<\/li>\n<li>\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Liquid and robust financial markets<\/li>\n<li>\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Low risk of geo-political or financial instability<\/li>\n<\/ul>\n<p>Many investors fled to\u00a0gold assets in the aftermath of the financial crisis with the precious metal peaking at $1,920 in the summer of 2011, however, the yellow metal\u00a0has struggled to maintain its gain<em>s,\u00a0falling below $1,180 for the first time in four years during October. Photo:\u00a0Shutterstock<\/em><\/p>\n<p>Historically, the \u2018safest\u2019 haven in periods of turmoil has been gold (although the commodity has experienced price peaks and troughs). Typically, there are defensive sectors within each asset class.\u00a0For example, traditional defensive sectors are pharmaceuticals within equities; Treasuries within bonds; US dollar, Swiss franc\u00a0and yen\u00a0within forex.<\/p>\n<p><b><strong>What this means for traders:<\/strong><\/b><\/p>\n<p>The Australian government is actively trying to cool the rise in AUD, while the euro appears set for a period of rebalance as the region battles economic decline and worries over the impact of geopolitical troubles, particularly in Ukraine and the Middle East.<\/p>\n<p>EUR recently hit a 21-month low against the CHF and was struggling against JPY too, which some consider the most secure safe\u00a0haven within G10. The threat of war and deflation at a time when other developed economies are deep into recovery does not bode well for the currency.<\/p>\n<p>The key in the short-term will be interest rate decisions in the UK and, more importantly, the US. The markets are expecting the US economy to be strong enough to bear an interest rate hike in the first-half 2015.<\/p>\n<p>If a rise occurs within that timeframe then emerging market debt and currency, which are already being hit by a flight from risk and search better quality yield, should\u00a0continue to face headwinds.<\/p>\n<p>As ever, traders will be watching central bank action in Europe, UK and US. It could be a choppy ride, but one where the odds seem to have returned in favour of traditional \u2018safe havens\u2019.<\/p>\n<p>&nbsp;<\/p>\n<p><em><strong>About the Author<\/strong><\/em><\/p>\n<p>Article by\u00a0<a href=\"http:\/\/uk.saxomarkets.com\/\" target=\"_blank\"><span style=\"text-decoration: underline;\"><strong>SaxoMarkets<\/strong><\/span><\/a><\/p>\n<p>Original Article:\u00a0<a href=\"http:\/\/uk.saxomarkets.com\/trading\/forex\/what-the-new-breed-of-safe-haven-currencies-means\" target=\"_blank\">http:\/\/uk.saxomarkets.com\/trading\/forex\/what-the-new-breed-of-safe-haven-currencies-means<\/a><\/p>\n<p>&nbsp;<\/p>\n<p><b><strong>Disclaimer<\/strong><\/b><b><strong>:<\/strong><\/b>\u00a0Our products are traded on margin and it is possible to incur losses that exceed your initial deposit.<\/p>\n<p>This material should be considered as a marketing communication under the Financial Conduct Authority\u2019s rules. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, nor is it subject to any prohibition on dealing ahead of the dissemination of investment research. Saxo Capital Markets UK Limited (\u201cSCML\u201d) undertakes reasonable efforts to ensure that any information published in this communication is reliable. SCML makes no representation or warranty, or assumes no liability, for the accuracy or completeness of any information contained in in this communication.<\/p>\n<p>SCML provides an execution only service and this communication does not take into account any particular recipient&#8217;s investment objectives, special investment goals, financial situation, and special needs and demands and nothing herein is intended as a recommendation for any recipient to invest or divest in a particular manner and SCML assumes no liability for any recipient sustaining a loss from trading in accordance with a perceived recommendation.<\/p>\n<p>Saxo Capital Markets UK Limited is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871\u200b<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Alternative &#8216;safe haven&#8217; currencies seem to have retreated, with markets returning to traditional &#8216;safe haven&#8217; FX for the first time since the 2008 financial crisis By SaxoMarkets \u200bSince the beginning of the 2008 financial crisis that drew large Western economies into turmoil, investors sought more niche currencies such as the Canadian\u00a0and Australian dollars.\u00a0However, recent price [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-63428","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/63428","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=63428"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/63428\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=63428"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=63428"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=63428"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}