Market news
15.05.2023, 06:22

Dollar and Dollar-denominated bonds continue to play a safe-haven role – Natixis

Economists at Natixis seek to determine whether or not the Dollar or Dollar-denominated bonds continue to play a safe haven role in times of crisis and rising risk aversion.

Is the Dollar still a safe haven asset?

“We found a significant effect of a rise in risk aversion (in the sense that higher risk aversion leads to a lower US long-term interest rate and an appreciation of the Dollar) as regards the Dollar long-term interest rate and the Dollar/Euro exchange rate, but, curiously, not as regards non-residents' purchases of US bonds and liquid assets.”  

“We also found that in the recent period (since 2012), the effect of risk aversion on the long-term interest rate and on the Dollar/Euro exchange rate has been stronger than in previous periods.”

 

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