Is the US Dollar Still A Safe Haven?
by Rebekah Manning
Despite all the economic news against the US Dollar, it still carries the title of “market’s ultimate safe haven.” Investors around the world feel the dollar, neither the Euro nor the British Pound, is a economic safe haven and are pumping their foreign currency into the US during risky times. But how long can this play last without the dollar showing any strong fundamental signs.
Positives for the US Dollar
Data shows that the US may finally be emerging from one of the work economic crisis’s since the Great Depression, but is that enough to keep the dollar as a global safehaven?
- Strong 2.2% rise in consumer spending bodes well for the dollar
- Biggest rally in the DOW in almost 4 weeks
- Interest rates are holding steady for the dollar, causing some strength for the currency
US Dollar Negatives
- US 1QGDP did grow, but far less than expected
- Potential for 6 more banks to FAIL the stress tests
Where there are fundamental reasons for the dollar to strengthen and for it to weaken, the USD is still seen as a safe haven currency and as long as there is event risk, foreign currency will continue to be pumped into the dollar.
About the Author - Rebekah Manning
Rebekah started in the Forex industry as an intern in 2001, and worked her way up the ranks to a C-level management position. She enjoys the field of trading as well as MMA fighting, shooting ranges, and action movies.
