The U.S. dollar trumps virtually all other currencies in the current environment of fear because of its safe-haven status, Jan Loeys, chief market strategist at JPMorgan Chase, told Bloomberg TV.
Loeys' main thesis is that the world economy looks ugly. And before it gets any better, it will get worse, predicted Loeys.
In Europe, the sovereign debt crisis is starting to get out of hand and exposes the Eurozone's fundamental weakness of not having a fiscal union.
You see capital flight across Europe, said Loeys.
In the U.S., the fiscal situation is total chaos, he said. The U.S. deficit and debt load is unsustainable. Washington, however, is showing little leadership on this issue -- and creating a great deal of uncertainty for the economy and markets.
Things may eventually get better. For Europe, Loeys thinks it will eventually pull together to form a fiscal union. However, he thinks the situation will deteriorate before any turnaround.
Fundamentally speaking, he thinks many emerging countries are in better shape than the U.S. and Europe.
In this period of heightened fear and uncertainty, however, he pointed out that capital flees from emerging market countries. He said the currencies of several emerging market countries already collapsed.
You've got to be defensive, he said.
To do that, the U.S. dollar, and the Japanese yen to a lesser extent, is still the best bet for global investors, he added.
Email Hao Li at email@example.com.