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U.S. dollar no longer the dominant 'haven' currency, analysts say

Section: Daily Dispatches

By Adam Samson
Financial Times, London
Tuesday, September 26, 2017

Has the king of currencies been dethroned?

The dollar is no longer the catch-all haven currency of the past.

Thank "idiosyncratic risks," say analysts at Bank of America Merrill Lynch.

Adarsh Sinha, a strategist at the U.S. investment bank, crunched the numbers and found that the greenback hasn't really been "safe" since 2014. It has tended to depreciate against most of the major currencies during nervous episodes, he notes.

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"Perhaps unsurprisingly, this coincided with the end of Fed [quantitative easing] and the emergence of more aggressive easing by the European Central Bank and Bank of Japan," said Mr Sinha.

An analysis from SEB yields a similar result, showing that the buck tends to correlate positively with the S&P 500, the stock barometer that provides something of a gauge for risk appetite, except during times of exceptional financial stress. ...

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