US President Donald Trump’s regime is creating uncertainty in global markets, causing analysts to shift their attention towards safe haven currencies. The British pound and Japanese yen are expected to be winners in this environment.
Jane Foley, head of FX strategy at Rabobank London, expects the British pound to continue its upward trend due to a modest trade surplus with the UK, making it less likely to be targeted by US tariffs. Sterling has gained 1.6% against the US dollar since the beginning of the year.
Japan’s yen is also favored, with Foley noting that Japan’s policy environment and strong hand in dealing with the US make it an attractive option for investors seeking a safe haven. The yen has gained 5% against the greenback this year.
David Roche, strategist at Quantum Strategy, calls the Japanese yen “the new safe haven” due to the Trump administration’s policies creating volatility in the West. He believes that geopolitical instability could cement the yen’s status as a hedge against market uncertainty.
However, not all analysts agree on the euro being a safe haven. Kamal Sharma at BofA Global Research notes that FX markets have taken overnight announcements in stride and argues that high beta G10 currencies are under pressure, particularly antipodeans affected by China-related proxies.
Meanwhile, Christian Mueller-Glissmann at Goldman Sachs expects the US dollar to rise, despite market concerns about Trump’s policies. The Swiss franc’s total return outlook is not compelling, according to Schnider, who notes that it remains under pressure against better-yielding currencies like the Australian dollar and British pound.
Source: https://www.cnbc.com/2025/03/04/fx-markets-how-trumps-policies-could-influence-us-dollar-price.html