Nordea’s Jan von Gerich observes that recent equity weakness has not produced a stronger Dollar, suggesting its traditional safe-haven role is less dominant than before. He links this to market reactions around the Middle East conflict, where Oil and yields have been more responsive, while the USD’s response to risk-off episodes appears more muted than in past crises.

Risk-off flows bypass Dollar strength

"It is worth noting that the most recent dip in equity prices did not spur a stronger USD any more, further suggesting that even if the USD has certainly not lost all its safety appeal, its status is not fully what it used to be."

"Huge swings in financial markets have continued lately as the conflict in the Middle East evolves, and there have been quite contradictory comments regarding the outlook for ending the war."

"Some negotiations seem to have started during the week, and even peace proposals have been presented, but the different sides appear to be very far from each other and the uncertainty remains elevated."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)