The events of last week saw the precious metal sold off, whilst other safe haven currencies
like the JPY and an unexpected EUR are in demand.
The heightened uncertainty has triggered risk aversion in the market early in the week, supporting traditional safe haven currencies
such as the Swiss franc and the Japanese Yen.
While there is likely to be initial turbulence in global financial markets and a flight to safe haven currencies
and assets, notably to the US dollar and US Treasuries, the contagion effects to Asia may be limited if the rest of the Eurozone is successfully ring-fenced from the Greek exit," said Rajiv Biswas, Asia-Pacific Chief Economist, IHS Global Insight.
stocks and falls in commodity prices, fueling demand for the yen and the dollar, both of which are deemed as safe haven currencies
Safe haven currencies
such as the British pound and the Danish krone have strengthened against the single currency, which is only partly good news since it makes their exports more expensive.
Both the dollar and the yen, safe haven currencies
that tend to strengthen in times of market stress, rose.
We already trimmed recommended tactical risk at end-June in anticipation of these uncertainties (and others), and instead would focus now on the probability that a material default will indeed be avoided, that recovery will continue and that this leaves developed equity markets in particular looking inexpensive Clients who are more pessimistic, or risk averse, might want to consider some general portfolio insurance in the form of instruments that are linked to stock market volatility, safe haven currencies
like the yen or Swiss franc, or even gold.
The dollar had strengthened in recent days as traders sought refuge in traditional safe haven currencies
, but eased back yesterday after investors in America returned to US stocks thanks to yesterday's cheery economic and corporate news.
But another disappointing read on US consumer confidence released later in the overnight session eroded investors' risk appetite and the safe haven currencies
staged a comeback.
Given the noted signs of an important turn lower in equities and FX carry trades, there looks to be great upside potential for safe haven currencies
like the US dollar and Japanese yen in coming weeks.
Intervention by the Swiss National Bank is effecting a decoupling of the Swiss franc from the other safe haven currencies
Strong safe haven currencies
like the USD, Euro, Swiss, Pound and the Japanese Yen were well bid especially due to their status of reserve currencies.