Dollar’s Best Week Since April Shows It Still Has Haven Appeal
- Greenback still retains yield advantage despite Fed policy
- Liquidity and lack of better alternatives are other arguments
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A nascent revival in the dollar, after a summer of predictions about its demise, is highlighting why it’s still the ultimate haven currency for some investors.
After abandoning the greenback due to the Federal Reserve’s accommodative policy, traders are piling back in, leading to a squeeze of short positions. Liquidity, yield advantage and a lack of alternatives have helped to rekindle interest just as the U.S. starts to get a handle on the coronavirus pandemic in some places.