By Adam Clark
The U.S. dollar was strengthening as investors turned to the currency as a haven asset in the face of the Iran conflict. American energy independence and the potential for rising oil prices to affect the Federal Reserve's interest-rate policy leave the greenback looking attractive.
The DXY dollar index -- which tracks the value of the currency against a basket of major peers- was up 0.8% at 98.42 early Monday, its highest level in more than a month.
"Until investors have a stronger idea of when this conflict ends, we would expect the dollar to stay supported," wrote ING analyst Chris Turner in a research note.
The dollar has been hit in the past year by a rotation toward alternative havens such as gold, as well as rotation toward overseas assets, especially in emerging markets.
However, the U.S.'s plentiful domestic energy resources mean its economy should be relatively shielded from a spike in oil prices caused by disruption in the Middle East. While gas prices might still head higher at the pump, the U.S. has the ability to ramp up its own oil supply if prices justify bringing more expensive production online.
Investors will still be assessing whether a rise in energy prices means the Fed will hesitate to lower interest rates. Higher rates support the dollar by boosting the rate of return on Treasury notes and other dollar-denominated assets.
"Higher energy prices and questions over the Fed's ability to cut rates will stop and potentially reverse portfolio flows into emerging markets, " ING's Turner wrote.
Write to Adam Clark at adam.clark@barrons.com
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(END) Dow Jones Newswires
March 02, 2026 03:53 ET (08:53 GMT)
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