Credit Agricole’s managing director Valentin Marinov called the US dollar the “ultimate” safe haven in light of recent economic uncertainty. 

Speaking in an interview Friday with CNBC’s Capital Connection Program, Marinov explained the global economy may be trending towards a recession on par with the Great Depression. 

Marinov, who serves as head of G10 FX research, commented on the IMF’s updated World Economic Index released earlier in the week. 

He said, 

We may be dealing with the worst economic recession since the Great Depression. So I think that is only the beginning of the downturn and the data could indeed deteriorate further.

He continued, 

Investors, not only in the FX world but the stock market and bond invests, should brace themselves for further deterioration to come.

Marinov was asked by the show’s host whether the market had witnessed an abrupt halt to the US dollar’s rally, as indicated by the US Dollar Index. The Credit Agricole director argued for the dollar as the “ultimate safe haven,” and explained its recent rally.

He said, 

There were a couple of reasons for the dollar to rally looking back till March. One was the fact that dollar was, and remains the ultimate safe haven. That helped a lot and we’ve seen glimpses of that returning in the last few days when the dollar managed to regain some ground.

Marinov also highlighted the “dollar scarcity” phenomenon created by investors selling all available assets to get their hands on cash. However, he said the Fed’s money-printing efforts have alleviated the fear of a dollar shortage and commented there are “plenty of dollars sloshing around the financial system. 

He concluded, 

The longer investors worry about the economy impact of COVID-19, which makes them risk-averse, the dollar would be the best place to go.

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