USD will weaken against most G10 peers in the long term – UBS

The US Dollar has weakened in response to lower Fed rate expectations following the recent events. Economists at UBS expect the greenback to lose ground against most G10 peers in the long run.

Investors worried about the risk of a financial crisis can consider CHF and Gold

“In the near term, the Dollar’s status as a safe-haven could help keep it relatively highly valued. But for the longer term, we continue to believe that the USD will weaken against most G10 peers and think that investors can use periods of dollar strength to reduce allocations to the currency.” 

“Investors worried about the risk of a financial crisis can consider diversifying into traditional safe havens like the Swiss Franc and Gold.” 

“For those with more risk appetite, the prospect of the Fed tightening policy less aggressively than the ECB should favor the Euro. And for investors who believe that China’s domestically driven consumption recovery can continue despite the events in the US banking system, we recommend the Australian Dollar, where we have a most preferred view.”