Experts expect the dollar to achieve new record levels by 2026, as a result of the escalation of the conflict in Iran and rising energy prices. These factors increase the attractiveness of the dollar as a safe haven in light of the increasing geopolitical and economic instability. The “dollar index” has already risen to 100.15 points, and is heading towards achieving its strongest close in more than three months, while major currencies such as the “euro” and “yen” are witnessing a decline.
Options markets show increasing bets on the continued strength of the US currency, as risk repercussions indicators rose to their highest levels since late 2022. This comes in conjunction with the return of “Brent crude” to exceed $100 per barrel, and increasing concerns about oil supplies after the attacks that targeted facilities and oil tankers.
These developments also reinforce expectations of higher “US inflation” and postponement of interest rate cuts, which further supports the dollar by increasing the spread in yields. In addition, markets are closely watching major central bank meetings to learn their strategies for dealing with the energy shock and the expansion of the conflict. (investing)
