Traders Explore FX Havens as Rising Rates Dent Case for Bonds
- Chinese renminbi has proven to be a rock amid recent turmoil
- Yen option skews suggest investors using calls for insurance
A worker removes cooled 12 kilogram gold ingots from their molds at the foundry in Kasimov, Russia.
Photographer: Andrey Rudakov/BloombergThis article is for subscribers only.
The prospect of Federal Reserve policy tightening and signs of thinner bond market liquidity are denting the case for Treasuries as a reliable haven just as amped up geopolitical tensions around Ukraine have investors on alert for potential refuge assets.
That’s spurring some to look more closely at currency markets in particular for alternative ways to protect themselves that are potentially better suited to the task at the moment. The offshore yuan is one place some are looking, while others are fans of Japanese yen call options. And, of course, gold is a perennial sanctuary.