Ulrich Leuchtmann, Head of FX and Commodity Research, highlights how quickly the US Dollar could lose its safe haven status. AS ECB expectations are being revised to the downside, but to a much lesser extent than the Fed's, the Euro is set to profit.

ECB policy seems much cleverer

“It is much less likely this morning that the Fed will add another 50 bps – seeing that the policy implemented so far has already caused considerable stress.” 

“So far, I have found nobody who projects a rate cut, but I expect the first projections of this nature during the day if nervousness does not ease immediately.”

“And not just that the Fed expectations are now having to be massively revised to the downside. Suddenly the much more cautious ECB policy seems much cleverer. Because it leaves more time for market participants to adjust.”

“That is how quickly the Dollar can lose its status as a safe haven, which it enjoyed against the Euro recently!”