At times of uncertainly, there is always a flight to safety and as global stock markets weaken. The USD remains resilient as currencies are relative to the economies of other countries.
It’s a recurring consensus that the USD is the strongest currency, and Senior Currency Strategist, Hamish Muress from OFX told us:
The dollar is king – possibly also followed by the Japanese Yen and Swiss Franc. Focussing on the USD though it is clear to see how times of huge uncertainty in the market sees investors flood back into the relatively safe US Dollar. Since the start of March the US Dollar has rallied 10% against its global peers.
Typically all of these currencies perform well because investors look to park their assets US Treasuries, Japanese Government Bonds, or Swiss Government Bonds.
Why? Well investors reason that these countries will never default on their debt so they act as safe bets and in order to buy these underlying assets investors first of all need to purchase the domestic currency.
Hence we see in time of uncertainty or ‘risk off’ these currencies perform well.
The likelihood of currency markets closing is very very unlikeky so If you are converting funds to USD, you can compare currency quotes from currency brokers here. Or if you are more interested in speculating or hedging on the foreign exchange markets you can do so through a Forex broker.
Richard founded the Good Money Guide (previously Good Broker Guide) in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.