USD: Safe haven flows and de-dollarisation debate – Rabobank

Rabobank’s Senior FX Strategist Jane Foley observes that speculators have been rebuilding long Dollar positions as the US currency acts as the preferred safe haven during the Middle East conflict. She stresses that long USD positioning remains below past peaks and that de‑dollarisation pressures from Russia, China and the EU persist, though near‑term Dollar moves should still hinge on risk appetite and US rate expectations.

USD positioning and structural challenges

"The latest release of CFTC FX positioning data suggest that speculators have continued to rebuild long USD positions."

"For now, we continue to expect the USD to act as a safe haven on bouts of reduced risk appetite with additional support likely being drawn from reduced rate cut hopes."

"CFTC speculators’ positioning data indicate that despite the improvement in the USD’s value in the spot market since late February, current long USD positions are significantly smaller than their peaks in recent years."

"In our view the USD’s safe haven credentials are built around its liquidity and its use as a transactional currency around the world."

"This suggests that for now the USD is likely to remain a safe haven."

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