King Dollar Dethroned From Safe-Haven Perch in Carry-Trade Shift

Bloomberg/Sid Verma/09-27-17

The euro and the yen have quietly usurped the dollar as the world’s favorite haven, according to Bank of America Corp. strategists.

…”The dollar no longer displays dominant ‘safe-haven’ behavior unless the risk-off is driven by China or Korea concerns,” Sinha and his colleagues in Hong Kong and London wrote.

Foreign-exchange havens including gold outperformed the dollar on a volatility-adjusted basis when the bank’s Global Financial Stress Index showed market dislocations over the past three years.

PG View: This is part-and-parcel of the more broad ongoing erosion of the dollar as the global reserve currency.

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