Investors poured into safe havens like the yen and Swiss franc on Monday and heavily sold the risk-sensitive Australian dollar as the market rout from US President Donald Trump’s sweeping tariffs deepened and fears of a global recession grew.
Global markets were sent into a tailspin on Monday as Asian stocks and Wall Street futures plunged and investors wagered that the mounting risk of a deep economic downturn could lead to a cut in US interest rates as early as May.
The dollar fell 0.63 per cent against the yen to 145.92, after tumbling more than 1 per cent earlier in the session, as the US dollar extended its 2 per cent slide against the Japanese currency from last week.
“The big theme has been selling USD/JPY because it’s a good US recession proxy and it’s a good US yields proxy and US yields tanked,” said Brent Donnelly, president of market maker and analytics firm Spectra Markets.
The Swiss franc jumped more than 0.8 per cent to 0.8531 per dollar, building on its 2.3 per cent surge against the US currency last week.
Both the yen and the franc have emerged as significant winners in the aftermath of Trump’s latest tariff salvo as investors dump riskier assets and flock to safe havens in a move that has also seen gold and government bonds catch a bid.
