(Bloomberg) -- While all eyes are on the inverted yield curve, it turns out what really matters for the dollar may be the hump.

The spread between three- and five-year U.S. bond yields turned negative for the first time since 2007 on Monday, rekindling concern that the world’s biggest economy is closer to a recession. Inversion -- where rates at the short end rise above those at the long end -- has been a reliable indicator of economic contractions in the past.

Yet Deutsche Bank AG reckons there’s another harbinger, this time for the greenback, in whether the curve is concave (bullish) or convex (bearish).

“The crucial question,” wrote London-based strategist Robin Winkler, “is whether the U.S. rates curve retains enough curvature relative to other currencies to offset the drag from its inverted slope.”

The dollar’s strength can been seen in its “steep and concave, hump-shaped curve relative to the rest of the world,” according to Deutsche Bank. That hump may now be about to collapse under a less-hawkish Federal Reserve, according to the strategist.

“The recent dovish turn from the Fed poses downside risks to the dollar’s curvature support,” he wrote in a recent note. “In our view, curvature is likely to decline.”

The warning comes as the greenback slips this week against most of its G-10 peers in the wake of a possible trade truce between the U.S. and China, which could reignite the reflation trade that held the currency back at the start of 2018.

As evidence of the curve’s predictive powers, Winkler cites the weakening of EUR/USD in 2008, which he says was signaled not in the rate differential but rather in the relative shape of their two curves.

“With the U.S. business cycle maturing and the Fed approaching neutral, the term structure of U.S. rates increasingly points to dollar weakness,” Winkler wrote. “High carry on its own, contrary to conventional wisdom, is not enough to keep the dollar strong.”

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