From a currency market perspective, the Middle East conflict has corresponded with a strengthening in the dollar.
The dollar’s ascent started to take shape over the course of February as markets positioned for a possible breakout of military action between the US and Iran (war commenced on the 28th).
The dollar’s appeal as a safe haven during periods of heightened uncertainty has interlinked with the energy price shock arising from the Middle East conflict.
Looking ahead, the outlook for the dollar will be heavily influenced by the evolution of the US-Iran war and, by extension, the trajectory of oil prices.
