Commerzbank: EUR turns into a safe haven
Analysts at Commerzbank claim that euro is becoming a safe-haven currency (the one which is bought when the markets are in the risk-off mode), while US dollar is losing such a status. How so? Firstly, the euro area has emerged from recession and many economists already forecast a significant recovery. Secondly, European interest rates will likely stay low for a long period of time as we can judge from the ECB’s forward guidance, and safe havens do have low yields. US dollar yields, on the contrary, will likely rise as the Fed normalizes its policy.
The specialists conclude that it means that EUR/USD will have little reaction on changes in global risk perception.