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In the past, the dollar was a safe-haven currency in recessions. This is not the case nowadays, for both structural and cyclical reasons. But the dollar has not been replaced in this role by another currency, but by precious metals and cryptocurrencies, per Natixis.

Key quotes

“The very drastic COVID-19 crisis has not led to an appreciation of the dollar, on the contrary in fact. The dollar quite rapidly depreciated against all currencies, which can be attributed to both structural causes (loss of confidence in the dollar’s solidity given the massive monetary expansion in the US and the increase in US external debt) and cyclical causes (the persistence of the economic crisis in the US).”

“While the dollar has depreciated against all currencies since the spring of 2020, no one currency has appreciated particularly against the others. Since the beginning of the COVID-19 crisis, there has been a sharp rise in the prices of gold and other precious metals and cryptocurrencies.”


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