George Saravelos, head of global foreign exchange strategy at Deutsche Bank, said that the further decline in the US dollar, combined with the decline in the US stock market and the rise in the US treasury bond maturity premium, will be the “strongest market signal” that the process of withdrawing US assets is accelerating. Although the latter has yet to appear, “if it does, it would be a very negative sign.” The sharp decline in the US dollar increased the possibility that the ECB would cut interest rates in April. Based on overnight interest rate swaps, this possibility reflected in market pricing is about 90%. By contrast, on Wednesday, the probability was about 70%. Deutsche Bank warned in March that the dollar might lose its traditional safe-haven status as the global market adapts to the new geopolitical order.

George Saravelos, head of global foreign exchange strategy at Deutsche Bank, said that the further decline in the US dollar, combined with the decline in the US stock market and the rise in the US treasury bond maturity premium, will be the “strongest market signal” that the process of withdrawing US assets is accelerating. Although the latter has yet to appear, “if it does, it would be a very negative sign.” The sharp decline in the US dollar increased the possibility that the ECB would cut interest rates in April. Based on overnight interest rate swaps, this possibility reflected in market pricing is about 90%. By contrast, on Wednesday, the probability was about 70%. Deutsche Bank warned in March that the dollar might lose its traditional safe-haven status as the global market adapts to the new geopolitical order.