The US currency’s demand as an ‘emergency dollar’ could be decreasing, Deutsche Bank’s Sameer Goel, who is chief Asia macro strategist told CNBC.

According to him, the currency markets are facing “multiple cross-currents” amid fears over a potential COVID-19 second wave.

The analyst believes that in a potential resurgence of cases, the US dollar could weaken against most of its peers in developed markets, including China.

Since March, investors have been preferring the greenback over its peers in the Group of 10 states, in part due to “emergency dollar demand” as the world went into a shutdown to stop the COVID-19 spread, Goel noted. 

Investors typically flock to the US dollar in times of uncertainty, particularly due to its position as the world’s reserve currency.

“That emergency dollar demand seems to be waning,” he added.

The analyst also noted that the US quarantine strategy looks worse than in the rest of the world. “Our mobility tracker suggests that, bulk of Europe, for example, is opening up faster than (the) U.S. is.”

Asked about the Chinese yuan, Goel noted: “We’ve seen yuan being relatively sort of stable and within a range, and that is partly to do also with ... a lot of dividend payments and the fact that obviously there was a lot of noise along the U.S.-China axis as well,”

“Of late, we have seen that it feels like at least the phase one trade deal seems largely secure, for now.”