Franc and yen gain as AI fears hit tech stocks: safe-haven currencies

The Swiss franc and the Japanese yen were the strongest major currencies in the ECB reference rates of 30 October. Fears about heavy spending on artificial intelligence (AI) hit tech stocks, and investors moved money into safer assets, according to an investingLive European session wrap.

In the ECB fixings, USD/CHF fell 0.68% to 0.8229 and USD/JPY fell 0.51% to 157.25 compared with 29 October. Investing.com reports that US Treasuries surged to wrap October in their biggest rally since 2024, and a separate Investing.com report says the tech selloff spurred bond bids and softened the dollar. Our sister site has more on how the dollar fell with yields as AI fears hit tech.

What is a safe-haven currency?

A safe-haven currency is one that investors tend to buy when they feel nervous. When stocks fall or the news turns scary, people sell riskier assets and look for places to park money. The Swiss franc and the Japanese yen are the two classic examples. Switzerland and Japan are seen as stable, and both have large pools of savings.

This behaviour links to a wider idea called risk sentiment. When markets are calm and confident, traders buy riskier assets, such as stocks and emerging-market currencies. When fear rises, the reverse happens. Safe-haven currencies usually gain in the fearful phase.

A safe haven is a tendency, not a rule. Other news can push these currencies around at the same time.

A worked example

USD/CHF tells you how many francs one US dollar buys. When the number falls, the franc is stronger.

• 29 October fixing: 0.8286
• 30 October fixing: 0.8229
• Change: 0.8229 minus 0.8286 = -0.0057
• In percent: 0.0057 divided by 0.8286 = about 0.68%

So CHF 1,000 bought about $1,206.85 at the first fixing (1,000 / 0.8286) and about $1,215.21 at the second (1,000 / 0.8229). The same francs bought roughly $8.36 more.

Now USD/JPY:

• 29 October: 158.06
• 30 October: 157.25
• Change: 157.25 minus 158.06 = -0.81 yen, or about 0.51%

Compare a currency that is often treated as riskier. USD/MXN rose from 18.747 to 18.908, a gain of 0.161 pesos, or about 0.86%. The dollar lost ground against the franc and yen but gained against the Mexican peso.

That split, havens up and riskier currencies down, is the typical safe-haven pattern.

Why it matters for new traders

First, a stock market selloff can move currencies that have nothing to do with tech. Knowing which currencies tend to attract fearful money helps you understand moves that seem to have no local cause.

Second, havens do not always behave the same way. investingLive reports that gold, another classic haven, fell too, hit by forced liquidations as equity losses mounted. Forced liquidation means investors selling assets to cover losses elsewhere. The same wrap also says Bank of Japan governor Ueda will stick to his rate hike path, which is a separate reason the yen could gain. One move can have more than one driver.

Third, remember these are ECB fixings, one official rate per business day. They are not live quotes, and prices during the day can differ. You can follow intraday action on a USD/CHF chart.

Key terms

• Safe-haven currency: a currency investors tend to buy in times of stress, such as the franc or yen.
• Risk sentiment: the overall mood of markets, from confident to fearful.
• Treasuries: US government bonds, often bought when investors want safety.
• Forced liquidation: selling assets, often at a bad time, to raise cash or meet losses.
• Reference rate (fixing): an official daily exchange rate, such as those set by the ECB.