The world's three major safe-haven currencies

Swiss franc, US dollar, Japanese yen.

The recognized traditional safe-haven currency is the Swiss franc. Switzerland is a permanently neutral country and is considered the safest place in the world. The Swiss franc has long been regarded as a traditional safe-haven currency by investors.

The U.S. dollar also often plays the role of a safe-haven currency in foreign exchange transactions. With the development of globalization, the US dollar has become the most important currency in foreign exchange transactions, and commodities, precious metals, etc. are all priced in US dollars. Therefore, once risks come, the market tends to convert the currency or assets in hand into U.S. dollars. At the same time, because of the free flow of U.S. dollars, the U.S. dollar has become the most convenient currency to avoid risks.

The reason why the Japanese yen has become a safe-haven currency is rather special, that is, low interest rates attract arbitrage transactions. However, with the real estate bubble in the 1990s, the Japanese economy entered the "lost 20 years". In order to stimulate the economy, the Bank of Japan continued to lower interest rates and maintained low interest rates for a long time, making the Japanese yen a low-interest currency and a safe haven. The most direct reason for risking currency. Therefore, the Japanese yen has become the currency with the lowest financing cost in the world. Therefore, when investment opportunities arise outside Japan, it attracts arbitrage traders. They can easily obtain huge amounts of cheap funds from Japan

Japanese Yen assets, plus the Japanese Yen is a freely convertible currency, so it can be easily converted to other currencies.

Safe-haven currency is also called hedging currency. It means that it is not easily affected by factors such as politics, war, and market fluctuations, and can avoid the above risks to the greatest extent. A relatively stable currency that is not prone to depreciation.

The Swiss franc has also become a stable and popular currency for international settlement and foreign exchange transactions. Swiss franc banknotes have denominations of 10, 20, 50, 100, 200, and 1,000 francs, and coins have 1, 2, and 5 francs and 1, 2, 5, 10, 20, and 50 cents. In the investment world, gold and oil are also considered safe havens, but they are not currencies.

Due to the close economic ties between Switzerland and Europe, the exchange rates of the Swiss franc and the euro show a great positive correlation. That is, the rise of the euro will also drive the rise of the Swiss franc. The relationship between the two is the strongest of all currencies. When investors in the foreign exchange market start to increase their risk aversion, the Swiss franc and the euro will rise at the same time.

The main characteristics of its cash can be simply summarized as follows:

Currency name: Swiss franc (swiss franc);

Issuing institution: Swiss country Bank (banque nationale suisse);

Currency symbol: chf;

Subsidiary currency carry: 1 Swiss franc = 100 centimes (centimes);

Banknote denomination: The denominations of banknotes are 10, 20, 50, 100, 200, and 1,000 francs, and the coins are 1, 2, and 5 francs and 1, 2, 5, 10, 20, and 50 cents.

The increased stability in the foreign exchange market has made the Swiss franc less attractive as a safe-haven currency.

Swiss National Bank President Ross: The shift towards a more flexible exchange rate mechanism and the globalization of financial markets have reduced the risk of a currency crisis. However, the increased stability of the foreign exchange market has also reduced the charm of the Swiss franc as a safe-haven currency.

Bob, an analyst at Bank of America: The market is highly complex and can avoid risks through different investment solutions, so the market demand for safe-haven assets and currencies is no longer strong.