Are safe-haven currencies such as the Swiss franc, yen, and dollar not so safe?

If you ask investors to name their safe-haven currencies, most will say the US dollar, the Swiss franc, or the Japanese yen.

Investors have historically expected value to be maintained even during geopolitical or economic turmoil.

But recently, these currencies themselves have experienced volatility. The dollar and yen depreciated sharply from 2025 to 2026. The franc has strengthened, but this is difficult for an export-dependent country with unusually low inflation.

US President Donald Trump has reordered global trade to impose tariffs in 2025, triggering a “Sell America” ​​trade to sell US assets, including the world’s reserve currency, the dollar.

The sudden imposition and removal of other tariffs added to the pressure.

Swiss private bank Julius Baer said in a December note that “unstable trade policy” was just one of the reasons for the dollar’s weakness, adding that President Trump’s “One Big Beautiful Bill Act” had put the U.S. on an “unsustainable debt trajectory.”

According to the memo, President Trump’s pressure on Federal Reserve Chairman Jerome Powell also undermined investors’ confidence in the dollar.

of dollar indexThe dollar, which is pegged to a basket of countries, fell 1.3% on January 29 after President Trump said the dollar was “doing well,” the biggest one-day drop since Trump first announced tariffs in April. The dollar has fallen to its lowest level in about four years.

The index declined by 9.37% in 2025 and further declined in 2026.

George Saravelos, head of currency research at Deutsche Bank, said in a note Wednesday that the dollar’s safe-haven status is a “myth.”

He disputes the idea that the dollar “rises in times of risk aversion,” adding: “A simple graph of the relationship between the dollar and stocks shows this is not true. Historically, the average correlation between the dollar and stocks has been close to zero, and over the past year the dollar has once again lost its correlation with the S&P.”

Cole Smead, CEO and portfolio manager at Smead Capital Management, told CNBC’s “Squawk Box Europe” in late January that he expected the dollar to weaken further.

“We are in a long-term dollar bear market,” he said. “If you look back at this ‘America mania'[in the market]if you look back at the telecom bubble and the tech bubble of the late 1990s, the dollar peaked in 2002, and within six years the dollar had fallen to a low it hadn’t seen (in a very long time).”

The U.S. dollar index plummeted about 41% between 2002 and its 2008 lows.

The Japanese yen seesaws into 2025, and rumors of intervention are currently swirling around Asia’s safe-haven currency.

At the beginning of 2025, the value of the yen against the dollar was approximately 156 yen. It rose when the Bank of Japan began to signal that it would continue raising interest rates, but remained around $150 for most of the second and third quarters.

It began to weaken rapidly after Sanae Takaichi became prime minister in October. The prime minister’s expansionary fiscal policy stance encouraged yen selling and pushed up long-term yields on Japanese government bonds.

The yen depreciated by 5.9% between Takaichi’s appointment and January 23, but on January 23, it was reported that the New York Fed had conducted an “interest rate check” on the dollar/yen, causing the dollar/yen to soar to around 152 yen.

However, the yen began to fall toward the 157 yen level, but it strengthened again after the Liberal Democratic Party won an overwhelming victory in Sunday’s House of Representatives election.

Analysts at Citi said the yen is unlikely to weaken much beyond the 160 yen level, given the possibility of prompting intervention by authorities in Japan and the United States.

Dutch bank ING said in a report dated February 9, “The yen is likely to approach the 160 yen level again, but there is a strong possibility that it will struggle between the market and the authorities around 159 yen.” U.S. Treasury Secretary Scott Bessent denied that the U.S. had intervened before cutting interest rates in January.

Unlike the dollar or yen, swiss franc Although the home country is not very large, Switzerland’s political stability, low debt, and diversified economy make it a safe asset. Last year’s search for stable assets provided a tailwind. It has maintained its value much more clearly than the dollar or yen.

Through 2025, the franc appreciated by about 13% against the US dollar. This increase was extended to 2026, hitting an 11-year high against the dollar. It also touched an 11-year high. against euro Early this month.

Fran’s path was completely uneventful. On January 30th, gold and silver The Swiss franc suffered a historic decline that wiped out its value by 30%, and investors also turned away from the Swiss franc, causing it to depreciate by about 1.2% against the dollar.

However, this day was one of the past 10 trading days in which the dollar declined against the dollar. But its strength is causing problems in Switzerland, where if it strengthens it could force intervention by authorities seeking to curb the hot currency’s influence on the broader economy.

Unusually among developed countries, Switzerland is suffering from weak price growth, and a stronger franc could put further disinflationary pressure on the country’s export-driven economy.

The country’s inflation rate is just 0.1%, and the Swiss National Bank’s main interest rate is 0%. The strong franc complicates the SNB’s monetary policy picture, as officials try to avoid a return to the unpopular negative interest rate policy that ran from 2015 to 2022.

Swiss officials have previously intervened in the foreign exchange market by selling francs and buying foreign currency to cool the country’s currency.

However, both the first and second Trump administrations have viewed Swiss central bank intervention as problematic, and this comes with risks.

Swiss National Bank Chairman Martin Schlegel told CNBC’s Karen Tso on the sidelines of the World Economic Forum in Davos, Switzerland, last month that the SNB is “ready to intervene in the foreign exchange market if necessary.”

Economists at Swiss investment bank UBS expect the franc to fall by about 2% against the dollar by the end of the year, but said in a note on Wednesday that the Swiss central bank is unlikely to “react strongly” to the currency’s appreciation.

“Sporadic currency intervention is possible, but widespread action is not justified given the limited deflation risks, optimistic global growth outlook and moderate overvaluation of the Swiss franc,” the official said.

However, the central bank said in a separate report that the franc’s future upside is limited.

A Reuters poll of economists earlier this month predicted the dollar would fall 2.2% against the franc by the end of April.

Matthew Ryan, head of market strategy at global financial services firm Everly, told CNBC on Wednesday that the dollar and yen have “definitely lost some of their luster recently,” while the Swiss franc is “consolidating itself as the primary safe-haven currency.”

Lee Hardman, a currency analyst at UK-based Japanese bank MUFG, agreed that the safe-haven appeal of the yen and dollar has been “eroded” by political turmoil.

“Over the long term,[the Swiss franc]has proven to be the best store of value among other G10 currencies, including the Japanese yen and the US dollar,” he said.