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Industry Updates

SEB Investment Outlook: 'Safe havens less attractive ahead'

Wednesday, July 01, 2009 Share

Opalesque Industry Updates - Lars Gunnar Aspman, Portfolio Specialist at SEB, the Northern European financial group, comments on the outlook for safe haven currencies in the attached article. this is part of SEB's Investment Outlook - Market view and portfolio strategy (published June 2009).

Please find a quick overview below:

• When complete financial market frenzy broke out last autumn there were gains for “safe havens” such as the Swiss franc (CHF), the Japanese yen (JPY) and the US dollar (USD).

• Now the outlook for a continued cautious increase in risk appetite and lower market volatility appears good. In addition, there has been mounting evidence that the global economic downturn is decelerating.

• What happens in the foreign exchange market in such an environment? The currencies that play the role of safe havens should weaken. The current strength of their currencies is hurting growth prospects in Switzerland, Japan and the US, countries that have now all witnessed sizeable GDP declines.

• In addition, their mone...

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