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US Dollar Winning the Safe-Haven Battle vs JPY and CHF

US Dollar Winning the Safe-Haven Battle vs JPY and CHF

Justin McQueen, Strategist

US Dollar Analysis & News

  • US Dollar the Preferred Safe Haven Over JPY and CHF
  • Short Squeeze Exacerbating US Dollar Bid
  • Political Uncertainty Adding to Fragile Risk Sentiment

US Dollar the Preferred Safe Haven Over JPY and CHF

Fragile risk sentiment has continued to benefit the US Dollar, which has taken the title of the preferred safe-haven from the likes of the Japanese Yen and Swiss Franc. Unlike the US Dollar, both JPY and CHF have been vulnerable to FX intervention risks with Japanese authorities frequently commenting on JPY strength whenever USD/JPY sharply moves below 105, while the SNB continues to point out that they remain active in the CHF. That said, another factor to consider for the greenback is the unwind of a market that was very short dollars, as I had been highlighting in the weekly positioning report.

Short Squeeze Exacerbating US Dollar Bid

US Dollar Winning the Safe-Haven Battle vs JPY and CHF

Political Uncertainty Adding to Fragile Risk Sentiment

US President Trump did not help matters for risk appetite after refusing to commit to a peaceful transfer of power if he lost the election, further increase concerns around the US election. Elsewhere, Fed Chair Powell raised questions as to whether the Fed are out of ammo having stressed the need for more fiscal stimulus (alongside other Fed speakers), while also adding that the Fed had done all the things that they could think of. That said, with little change in the narrative since the beginning of the week, safe-haven flows are likely to underpin the greenback with upside geared towards the 95.00 handle.

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US Dollar Price Chart: Daily Time Frame

US Dollar Winning the Safe-Haven Battle vs JPY and CHF

Source: IG

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