Currencies are moving solely as ‘risk’ assets with the strongest being the classic ‘risk off’ safe havens such as the US dollar, Japanese yen and the Swiss franc. Sterling, sadly, is considered a ‘risk on’ weak currency whilst the worst hit currencies are the commodity based like the Aussie dollar and the Norwegian krone, a petro-currency. This is shown in the ytd chart with the safe havens soaring, though with a pull-back towards the end of the month as the policy response resulted in a ‘risk-on’ rebound. The dollar especially pulled back after the announcement that the Fed’s printing presses will be even busier than in 2009. The surprise for me is that the euro has held up so well given the weakness of the Eurozone economy even before the pandemic and with the dysfunctionality of its politics now threatening its future. As with all assets, currencies will follow a binary ‘risk on/risk off’ pattern as investor sentiment waxes and wanes.

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