Is the dollar still a refuge currency on the forex? (Merrill Lynch)

Merrill Lynch notes that as political risks have resurfaced, the issue of the safe haven asset has returned to the sportlight.

"Using a market-based approach, ML analyses the priorities of a refuge currency, as well as sensitivities to specific risks.

We note three key points:

1- USD no longer holds the role of a dominant refuge, unless the risk comes from China or North Korea.

2- JPY is the currency closest to a safe haven (relative to other currencies) regarding the risk factors of a country, excluding North Korea.

3- CNH has benefited (albeit modestly) from the rising sense of risk, as well as the specific risk related to North Korea."