These safe haven currencies hold allure over the US dollar amid trump regime Volatily, Analysts Say

A Worsening Outlook for the Us Economy and Expectations for Further Market Volatily are driving shifts in currency valuations – with market watchers divided on which currencies that they see as Safe Safe Safe Safe Safe Safe Safe Safe Safe Safe Havings.

Geopolitical developments from just this month have seen us tarifs on canada, mexico and China Come Into Affect, President Donald Trump ‘s reported pause on Military aid to ukraine, Softer Us Economic Data out of the US And European Leaders Committing to Ramp up defense spending,

Jane Foley, Head of FX Strategy at Rabobank London, Told CNBC Via Email on Tuesday that She was expecting the British pound and the Japanese yen To be winners in the current environment.

“The fact that us data sugges that a modest trade surplus exists with the uk sugges that the latter is unlikely to be in trump’s sights and gbp is likely on courses Euro, “She said. “That said, it is stretch to call the pound a safe haven.”

Trump hinted After a meeting with British prime minister keir starmer last week that the uk may be able to avoid badcoming a target of us tarifs.

Sterling was trading at $ 1.2712 at 10:19 AM London Time on TimesDay, Marking a Rise of 0.1% Against the US Dollar, but fell by around 0.1% Against the Euro. Since the beginning of the year, the British currency has gained 1.6% against the greenback, according to lseg data.

“Japan also has a strong hand in dealing with the us,” Foley Told CNBC. “Although Japan has a trade surplus with the us, it is the largest holder of treasuries outside of the us and is the biggest provider of fdi (Foreign Direct Investment) to the US alredy Pledged to Increase Investment Flows Into the US and Japan’s Growing Defense Budget is Almost All Spent in the Us “

Foley also noted

“Insofar as Japan’s Fundamentals have improved and given the bank of japan is the only G10 Central Bank with a Tightening Bias, Credentials as a safe haven, “She said.

David Roche, A Strategist at Quantum Strategy, Agreed that Current Conditions Bolsted The Japanese Currency’s Long-Held Status as a Hedege Againsting, Suggesting that is founded The west count cement it as “the new safe haven.”

Speaking to CNBC’s “Squawkk Box Europe” on Monday, Roche discussed Oval office last Friday.

Roche argued that the trump Administration’s Policies Cold see the greenback landroned as the fx market’s safe haven.

“The big loser is actually the US, because nobody will Trust a Us Treaty Again,” He said of the US backing away from supporting ukraine. His comments came before a white house official told media on tuesday that us had packed all military aid to ukraine.

“You want to keep out of the euro And oven the yen, which is now the new safe haven as the us is getting to look very dangerous. “

Kamal Sharma, FX Strategist at Bofa Global Research, Took a different stance to roche on the euro, and argued that impact of trump’s tariffs may have a limited impact on.

” Recouping some of the initial losses, “He said in emailed comments on tuesday. “High Beta G10 FX are Under Some Pressure, Particularly The Antipodeans on the China Proxy.”

“We’ve used the term ‘tariff purgateory’ to describe how markets have been on alert for implementation since the start of the year,” Sharma Added. “The announsments were therefore not totally unsurprising in the context of what have alredy been said. Part of the narrative now is that overnight development Urgency to step up defense spending, and this is helping european stocks and (the euro) Via Higher (Bond) Yields. “

However, dominic school, head of global fx and communication at UBS Global Wealth Management, Argued Against the case for the Swiss Franc Rallying on the back of development

“The Franc’s ‘Safer-Haven’ appeal is diminishing as geopolitical concerns ease, and investors may shift more significantly Toward Higher-Yielding Currencies Such as the (Australian Dular) Pound), “He said.

“The Swiss Franc’s Total Return Outlook is Not Compeling, In our View, While It Should Trade Sideways Versus The Euro for Most of the year, the franc remains under pressure Yielders, “Schnider Added.

Meanwhile, Christian Mueller-Glissmann, Head of Asset Allocation Research at Goldman Sachs, Told CNBC’s “Street Signs Europe” on Monday that He Style Expects the dollar to risk. Since the beginning of the year, the dollar index – Which measures the US currency against a basket of major rivals – has shd 2%, after rising by 7% over the course of 2024.

“We do think there’s still upset … The (US) Dollar,” Mueller-Glissmann Said. “I know the dollar batters a different story now … with the rest of the world looking better. But if you want to look at safe haven Franc – our team has looked a lot into the impact of tarifs on Switzerland, and it might actually be lower