Crisis Hedging: JPMorgan: In These Currencies Investors Should Invest In A Recession Message

"During a recession, creditors claim money," Bloomberg said in a statement from JPMorgan. Therefore, investors should not bet on emerging market currencies at these times, but rather invest in the Swiss franc, the US dollar, the Singapore dollar or the Japanese yen.

US Dollar – The Leader

The US Dollar Profits, According to JPMorgan Analysts, To Be The World's First Currency And Should Be Purchased From The Rest Of The World When Banks and debtors in a recession. The US currency has "outperformed" in recent months, while tensions on international trade have increased more and more.

Yen auspicious

According to Bloomberg, JPMorgan's experts have closely examined the currency's evolution over the last five recessions. However, although the yen has not been very impressed in this analysis, it should play a central role in hedging a recession this time around, analysts said.

They base their recommendation on the fact that the Japanese currency is the cheapest among the currencies suitable for hedging. For example, the real effective exchange rate adjusted for relative inflation is 23 percent below the average of the past 40 years. In contrast, the yen exchange rate had been revalued by 8% as the last three recessions approached.

Risks Related to Ports of International Trade Disputes

JPMorgan's team of analysts pointed out that it is still too early to talk about a recession. However, it makes sense to consider emergency plans in case of a crisis, as an escalation of trade disputes is likely.

Editorial Staff finanzen.net

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