Risk Aversion Sends Traders To Safe-Haven Currencies, ETFs | ETF Trends

After the muted data on the U.S. economy, and with the U.S. dollar weakening against the Japanese yen and Swiss franc, traders are turning to the safe-haven currency exchange traded funds (ETFs).

CurrencyShares Japanese Yen Trust (NYSEArca: FXY) was up 0.90% and CurrencyShares Swiss Franc Trust (NYSEArca: FXF) was up 1.65%.

The U.S. dollar depreciated to all-time lows against the Swiss franc and declined to a four-month low against the Japanese yen during trading, reports Gertrude Chavez-Dreyfuss for Reuters. The franc and yen quickly appreciated after data revealed a slower-than-expected U.S. economic expansion. [Swiss Franc, Yen ETFs Rally On Safe-Haven Status.]

“We are in a selective risk-off environment, with the Swiss franc and yen gaining,” remarked John McCarthy, director of foreign exchange at ING Capital Markets. “The GDP numbers were very much the catalyst this morning and we saw aggressive moves in the dollar/Swiss franc and dollar/yen.”

Japanese Finance Minister Yoshihiko Noda has given a warning on the strong yen currency, and he has hinted at a possible intervention if rates keeps moving higher, which has kept the yen from rising any further.

However, the U.S. dollar appreciated against commodity-linked currencies, including the Australian, Canadian and New Zealand dollars – commodity-linked currencies tend to falter when investors are risk averse.

  • CurrencyShares Australian Dollar Trust (NYSEArca: FXA)
  • CurrencyShares Canadian Dollar Trust (NYSEArca: FXC)
  • WisdomTree Dreyfus New Zealand Dollar Fund (NYSEArca: BNZ)

CurrencyShares Japanese Yen Trust