US Dollar Safe Haven Status Restored Amid Iran Conflict and Oil Spike

For much of this year, the US dollar looked vulnerable.

Expectations of Federal Reserve rate cuts, volatile policymaking from President Donald Trump and stronger relative performance in other developed economies had pushed the greenback lower. The Australian dollar, in particular, had defied sceptics, climbing more than 6 per cent year-to-date above US71¢.

Then geopolitics intervened.

A fresh escalation between the United States and Iran, including US-Israeli airstrikes and retaliatory attacks, has abruptly restored the US dollar’s traditional safe-haven role. The US Dollar Index rose to 97.91, while the Australian dollar dropped sharply toward US70. . .