Dollar Nears 2026 High
The US dollar continued its upward trend for the third consecutive session on Thursday, nearing its highest levels since 2026, supported by rising oil prices and escalating concerns about global inflation.
This rise comes amid increasing geopolitical tensions in the Middle East, which have directly impacted energy and currency markets, prompting investors to seek refuge in the dollar as one of the most important safe havens in financial markets.
Rising Oil Prices Boost Dollar Strength
Global oil prices have seen a sharp increase in recent days, with Brent crude approaching $100 a barrel today after recording an increase of more than 10%, compared to $113.00 a barrel at the start of the week.
This rise is mainly attributed to geopolitical tensions in the Middle East, which have heightened concerns about disruptions to global energy supplies.
Statements from Iran, indicating the possibility of oil prices reaching $200 a barrel if the crisis escalates, have also contributed to increased anxiety in global markets.
Oil Market Volatility Due to Strait of Hormuz Tensions
Shipping traffic through the Strait of Hormuz has declined significantly following attacks on commercial vessels in the region, increasing investor concerns about the security of global oil supplies.
Despite the International Energy Agency's announcement of the release of approximately 400 million barrels of oil from strategic reserves to calm markets, oil prices continued to rise due to fears of ongoing tensions in the region.
The Impact of a Strong Dollar on Global Currencies
With the US Dollar Index (DXY) rising by more than 1.5% against a basket of major currencies, the dollar approached its highest level since November, bolstered by its safe-haven appeal during times of instability.
This rise was clearly reflected in global currencies, with energy-importing countries experiencing their biggest losses since the start of the crisis.
The euro and the South Korean won fell by between 2% and 3% against the dollar, while the Japanese yen and the Indian rupee each declined by more than 1.5%.
This is because rising energy prices increase the economic pressure on countries heavily reliant on oil imports.
Rising Energy Prices Threaten Global Economic Growth
Many economists warn that continued high energy prices could pose a real threat to global economic growth.
Higher energy costs typically lead to increased inflation, which could prompt central banks to reconsider their monetary policies and perhaps keep interest rates high for a longer period.
This scenario could put pressure on the global economy and increase uncertainty in financial markets.
Geopolitical Tensions Increase Market Volatility
Recent political and military developments have increased volatility in global markets, especially given the exchange of statements between the parties involved in the conflict.
US President Donald Trump stated that the United States is in a "very good" position in its conflict with Iran, emphasizing that Washington will pay close attention to the security of the Strait of Hormuz.
Conversely, US intelligence reports indicate that the Iranian leadership remains largely cohesive and is not currently facing the risk of collapse, despite the military strikes continuing for two weeks now.
