Foreign exchange market general knowledge - why the Swiss franc and the yen can become a safe-haven currency

{}Posted in2023/2/25 0:52:59 | 5Browse

When the global economy appears uncerta fxrebatecentral when the trend, foreign exchange investors first thought rebatesforexbroker to buy the cashback forex forexrebatecommission the Swiss franc hedge However, have you considered why Japan and Switzerland, two countries with small land area and lack of minerals, why can become a safe-haven best forex rebate company? The analysts explain what is a safe-haven currency before discussing this issue in depth, let us first understand what is a safe-haven currency safe-haven currency, also known as a value-keeping currency, refers to a currency bestforexrebatecompany is not easily affected by politics, war, market fluctuations and other factors, to avoid the above-mentioned risks to the maximum extent possible, more stable and not easy to depreciate The Swiss franc became a safe-haven currency as a matter of course by the definition of safe-haven currency, the Swiss franc became a safe-haven currency. The Swiss franc has long been viewed by investors as a traditional safe-haven currency, because Switzerland is still a permanently neutral country internationally and has an extremely strict banking secrecy system, with the Swiss National Bank setting monetary policy independently. In order to avoid risk, investors are also happy to hold the currency of those countries with current account surpluses, so Switzerland has a large current account surplus often motivate the market to buy the Swiss franc, thus driving the Swiss franc up coupled with the Swiss governments financial and foreign exchange protection policy, so that a large influx of foreign exchange into Switzerland. The yen has become a safe-haven currency for the reason that the next we will talk about the yen has become a safe-haven currency for the reason that unlike Switzerland, Japan is not a peace-loving country, while the current political situation in Japan is not stable, we all know that Japans Prime Minister replaced the diligent, may be one of the few exceptions in the world good, this time we have to wonder, this country But this country does not meet the criteria for issuing a safe-haven currency at all! Here we need to clarify a concept, that is, the hedge is temporary, not long-term holding that is to say, a large number of funds to buy the yen is not to make money, just for a moment of peace, waiting for the next speculative timing, it will leave these safe-haven currency and the real sense of the formation of the yens safe-haven properties can be attributed to the end of the last century in October 1998, the sudden fall of the U.S. hedge fund LTCM on the The market caused a huge impact, the yen rose 10% against the dollar that month, which made so that hedging transactions began to receive widespread attention from the market and central banks In fact, to explain the short-term movements in the yens exchange rate, especially the hedging properties, hedging transactions is a key word and the yens hedging properties are generally accepted by the market, is after the 2008 financial crisis 2008 financial tsunami, 2011 European debt Crisis, the U.S. debt ceiling crisis, the devaluation of the yuan in August 2015 and a series of events, these typical risk-averse period, the yen against the U.S. dollar exchange rate have been a strong pull up the most representative example occurred in 2011 in March of that year, the Japanese earthquake triggered a tsunami and nuclear leakage, as a matter of fact, should be no less than the depreciation of the yen factors, but in fact, the yen against the U.S. dollar not depreciated but rose. Although the rise was less than 1%, the popular view in the market at the time was that major Japanese insurance companies would sell off their overseas portfolio investments in order to cope with the earthquake related payouts, thus pushing the yen higher In fact, the sell-off of overseas assets for payouts did not occur It is evident that peoples hearts (expectations) are the core element that breaks the market price equilibrium in the short term. March 2011 appreciation of the yen and further solidified the yens safe-haven properties Finally, let us make a simple summary, safe-haven currencies or is not susceptible to market fluctuations, more stable, not easy to depreciate the currency, but depending on the situation, any currency may be considered by investors as a safe-haven currency, as long as it has the characteristics of a safe-haven at the moment safe-haven currency is closely related to the overall strength of a countrys economy, but also Related to a countrys long-term accumulation of good credit

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