US Dollar is not a safe haven at all – Commerzbank
US Dollar is dropping again today despite a strong labour market report. Economists at Commerzbank do not expect the greenback to recover.
What could save the Dollar at this stage?
“I could make it easy for myself and simply say: ‘If not even a labor market as strong as this one can provide sustainable support to the US dollar it clearly is beyond saving’.”
“One could of course assume now that the Fed would not have reason to lower interest rates again. However, this assumption would only be correct if the US financial market were to remain solid. Following years of cheap money, followed by a rate hike cycle of unparalleled speed some market participants might question that too.”
“Even in the absence of rising unemployment, there might be reasons for the Fed to lower its key rate once inflation pressure eases.”