Why investors seek safe havens?

In times of uncertainty, investors sell off risky shares and switch to defensive stocks or government bonds; they repatriate money from emerging market equities and currencies; and they sell out of positions in growth commodities like iron ore and put them into commodities like gold.

The US has long been regarded as a safe-haven destination. As the largest economy in the world, it is better equipped to ride out downturns. Its financial system is deep and liquid and the US Federal Reserve has broad powers and the balance sheet to prop up the economy with tools like Quantitative Easing (QE).

Finally, the US dollar is the global reserve currency, meaning whatever drama is taking place, trade is still conducted primarily in USD.

Another safe-haven currency is the Swiss franc. It has a stable government and financial system, and its independence from the European Union keep it relatively immune from any negative events in the region.

The Japanese yen is also seen as a safe alternative, evidenced by its sharp rise when the stock market tumbled in March 2020 on coronavirus fears and Saudi Arabia launching an oil price war.6

Trading safe-haven currencies is a matter of timing. While they will spike in times of market shock, they also move pretty quickly once the dust has settled.

For investors, holding cash or low-interest bonds is expensive, as money can get a better return elsewhere.

If you want to earn passive income and don’t have the time to follow the news or read charts, try BrozBot to automate your trading.

Our proprietary robot was built from scratch to provide a scalable and reliable solution which executes trades simultaneously at lightning speed.

BrozBot uses 100% technical analysis and depending on volatility, there can be anywhere between 5 and 10 trade setups on a typical day, and each trade setup may have between 1 and 12 entry points (buys and sells). An average day has approximately 30 trades.

To learn more go to https://brozbot.com and open your account for free!

#brozbot #cryptotrading #forextrading #tradingbot #automatedtrading