Is USD a safe haven asset?

This doctoral thesis investigates the U.S. dollar's (USD) role as a safe haven asset, employing wavelet analysis to assess its performance compared to other potential safe havens such as commodities, cryptocurrencies, and stock market indexes during periods of financial turmoil. The study is motivated by the need to identify reliable assets that can offer stability amidst economic and market volatility, particularly in the context of significant crises like the 2008 Global Financial Crisis and the COVID-19 pandemic. The literature review encompasses traditional safe havens like gold, as well as emerging assets such as Bitcoin and stock indexes, revealing mixed results regarding their effectiveness. Utilizing continuous wavelet transform and wavelet coherence, the study examines the temporal dynamics of the USD's safe haven characteristics, identifying periods where it significantly outperforms other assets. Findings indicate that the USD consistently exhibits robust safe haven properties compared to commodities, cryptocurrencies, and stock market indexes, although these characteristics vary over different time frames and economic conditions. This research enhances the understanding of the USD's dynamic behavior as a safe haven and provides valuable insights for investors and policymakers in improving portfolio diversification and financial stability strategies. The study contributes to the existing body of knowledge by employing advanced wavelet analysis techniques, offering a comprehensive temporal and frequency-based evaluation of the USD's safe haven properties. Future research directions are suggested to further explore the evolving landscape of safe haven assets in response to global financial challenges.