USD comeback as ultimate safe haven

According to the G10 factor model the past few days were dominated by risk off and the US dollar increasingly benefits from that sentiment. That had not yet been the case in mid-August when first the depreciation of the renminbi and then the global stock market crash caused by the collapse of the Shanghai Composite Index turned the attention of the financial markets to the risks in the Emerging Markets. 

However, that was merely due to the fact that the market was forced to price in a slower and more cautious US monetary policy than had been the case until then. This correction is now over. And as other G10 central banks, and above all the ECB and BoJ, are increasingly willing to ease their monetary policies further in view of EM risks these currencies are now once again more affected by general risk aversion. 

"As we had predicted the USD is currently experiencing a comeback as the ultimate safe haven", says Commerzbank.