Everything is possible for the Dollar at present – Commerzbank

Since Friday, the market has been dominated by fears of a renewed US banking crisis. Economists at Commerzbank note that the Dollar could trend toward either direction.

USD to appreciate if the situation settles down

“If the situation settles down, the Dollar is likely to appreciate as a result of recovering Fed rate expectations.”

“If nervousness remains high and if global contagion effects are feared, the Dollar might benefit in its role as a safe haven. However, if the crisis remains limited to the US, as it would seem for now, the USD might suffer a double blow – as a result of the adverse US risk environment that reduces the USD premium as a safe haven currency and due to possibly reduced scope for the Fed to react appropriately to inflation risks.”