In the midst of a tense trade environment, the safe-haven allure of the US Dollar fades.

BlockBeats News, May 6th: In a survey conducted by Reuters from April 30th to May 6th among 83 respondents, over 55% of them expressed concerns about the USD's safe-haven status, a significant increase from about one-third in the April survey. However, most people acknowledge that there is currently no clear alternative.

“I'm very worried,” said Steve Englander, Global Head of G10 FX Research at Standard Chartered. “If you had asked me this question two months ago, I would have said that for the dollar, the stimulus was the most important thing, and flows—who knows whether they are really receiving income—were secondary. Now it is clear that the market is more concerned about the longer-term fiscal path.”

Erik Nelson, Macro Strategist at Wells Fargo Securities, said: “We are more bearish on the dollar in the second half of this year. More people will recognize the weak hard data in the United States, and the Fed may cut rates as priced by the market, the exit from US assets, and concerns about the Fed’s independence could re-emerge.”

Brian Rose, Senior US Economist at UBS Global Wealth Management, said: “Everything depends on the independence of the Fed. If someone is worried that the Fed is losing independence, it will seriously undermine the USD’s safe-haven status. We see the yen or Swiss franc benefiting from the current situation, as they are some kind of backup safe haven.” (FXStreet)