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Where Are Global Players Going for Safety Now?


After an article about the Swedish krona becoming the new safe haven for global investors, it's time to let the charts confirm or deny that assertion.

MINYANVILLE ORIGINAL "Sweden's krona is becoming the new Swiss franc for investors seeking higher interest rates in a growing economy that has a trade surplus and falling debt load." This was the lead into an article in Bloomberg on Monday. I found the article interesting and decided to test their theory out in the charts to see if this is something I need to add to my daily checklist of market tells. So, let's see what the market is presenting in terms of confirming or denying evidence…


First, a little perspective…. How is the old safe-haven Swiss franc faring against the greenback?

Before I compare the Swiss franc versus the Swedish krona, I wanted to take a look at how the franc is holding up against the US dollar. The reason is that the US Dollar Index has been a big part of the "risk off" trade over the last several years – especially relative to the euro. But, does the greenback show up as safe harbor relative to the franc? The chart below tells us that the franc is the preferred choice on a very macro perspective – and it has been so since the buck peaked out versus the franc in the early 2000's. So, is this a sign of US dollar weakness or franc strength?

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The Swedish krona is showing similar strength versus the greenback since 2009.

The monthly chart of the USDSEK below shows a similar top left to bottom right direction as the USDCHF chart above. The wave counts may or may not be in sync, but the directional similarity is quite clear – meaning that the greenback has been in decline overall for a while now.

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