As global equities reel on escalating tensions between Russia and Ukraine, investors have dumped riskier securities, turning to safer assets and exchange traded funds to ride out the choppy waters.
During times of global turmoil, investors seek out safe-haven assets like the Japanese yen, Swiss franc, U.S. Treasuries, U.S. dollar and gold bullion.
“Investors turned to classic safe havens amid heightened tensions in Ukraine,” Joe Manimbo, senior market analyst at Western Union Business Solutions, said in a Reuters article.
For instance, the yen rose to a one-month high against the U.S. dollar after Russia gained control of Crimea, reports Joseph Ciolli for Bloomberg. The yen now trades at 101.43 per U.S. dollar.
Meanwhile, the Swiss franc jumped to a one-year high against the euro currency; however, the franc depreciated against the U.S. dollar.
“We start the week under pressure that built up over the weekend, thanks to aggressive rhetoric and action by Russian Prime Minister Putin,” Christopher Vecchio, a currency analyst at DailyFX, said in a note. “The Japanese yen and Swiss franc have filled the void as safe havens.”
The CurrencyShares Japanese Yen Trust (NYSEArca: FXY) was up 0.3% and CurrencyShares Swiss Franc Trust (NYSEArca: FXF) was down 0.4% Monday. Both ETFs track the movements of their respective currencies against the U.S. dollar. [Amid Turmoil, the Allure of Safe-Haven Currency ETFs]