Deutsche Bank: Concerns about the Federal Reserve's reduction of currency swap quotas may threaten the status of the US dollar

According to Golden Finance, Saravelos, head of foreign exchange research at Deutsche Bank, sources said this week that the European Central Bank and regulatory officials have informally discussed the possibility of the Trump administration pushing the Federal Reserve to exit the global investment and financing markets during times of market pressure. There is no indication that the Trump administration wants the Federal Reserve to reduce the currency swap quota provided in past crises. But just as the United States began to "distance itself" from its European allies, these discussions in Europe drew attention. Even if the Federal Reserve does not take action, any concerns about the reliability of swap quotas could harm the position of the US dollar. If this concern is prevalent among the Western allies of the United States, it could create the most significant driving force for global de dollarization since the establishment of the global financial architecture after World War II.