The US dollar has become the best safe haven on fears of a US shutdown
The yen, Swiss franc and gold fell in value in September, but demand for the US dollar rose, proving once again that it is the only truly valuable traditional safe haven.
Treasuries also followed gold lower as the looming U.S. government shutdown increases the likelihood that U.S. fiscal spending will spur bond issuance. With the Fed intent on keeping interest rates high for as long as possible, investors see no better safe haven than the dollar, which is still the recognized global reserve currency.
The US dollar has become the best safe haven on fears of a US shutdown
Treasuries also followed gold lower as the looming U.S. government shutdown increases the likelihood that U.S. fiscal spending will spur bond issuance. With the Fed intent on keeping interest rates high for as long as possible, investors see no better safe haven than the dollar, which is still the recognized global reserve currency.
Falling U.S. bond yields are stimulating demand for the dollar. Investors have suffered unprecedented losses for the third year in a row as the Treasury bond market has been devastated by liquidity shortages, tight Fed policy, increased issuance by the U.S. government and market volatility.
Against this backdrop, the U.S. dollar is a high-yielding, fast-moving asset and a safe haven, so it's not hard to guess that dollar strength will continue.
The Bloomberg Dollar Spot Index rose more than 2% in September, while alternative currencies posted losses. Global government bonds had their worst month of the year, while the Japanese yen and Swiss franc fell more than 2%. Gold also fell Bitcoin was down 14% for the quarter.
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