Flash: USD will only appreciate when markets understand the Fed - Commerzbank

FXstreet.com (Córdoba) - According to Ulrich Leuchtmann, analyst at Commerzbank, two factors have been dominating the FX market since late May: the flight into safe havens and the US dollar weakness. "That is unusual", he says. "The possibility of a more rapid beginning of the normalisation process in US monetary policy should support the dollar. However, at present uncertainty about the Fed's future approach is dominating".

"No matter in which direction the tapering expectations pendulum will swing in the future: a major recovery of the greenback is only likely to start once the Fed is clearer about its future strategy and is able to explain this strategy in a sufficiently convincing manner to the markets", Commerzbank analyst added.