The American dollar increased in early trade on Monday, using the traditional safe status of Haven after American military strikes on Iran-but analysts warn that benefits may be short-lived.
The dollar indicator increased by 0.45% at one point, which indicates profit in relation to currencies such as Japanese yenThe euro and British poundand also CanadianIN Australian AND New Zealand dollars. Greenback was recently trading about 0.4% higher at 9.30 in London.
“It is expected that the escalation of the crisis in the Middle East after the US attacks at the weekend will lead to some traditional effects of a safe marina on the market (such), when the oil price rises, lower capital prices and a stronger dollar,” said Kirstine Kundby-Nielsen, constant income and currency tests at Danske Bank.
Despite the initial rally, the growing consensus among investment banks suggests that the dollar strength may be temporary.
Some analysts say that the conflict in the Middle East is only masking concerns about the US fiscal policy, commercial wars and weakening of international demand for US assets, which can regain concentration when immediate demand for crisis demand. The dollar indicator dropped by over 8%this year, which reflects long -term fears.
The direct strength of the American dollar is related to the fear of how Iran can take revenge Closing of the Hormuz Strait – waterway necessary for oil transit – at the top of these fears.
However, RBC Capital Markets analysts warn that the situation is more complex, noting that Iran has the asymmetrical possibilities of “hitting individual tankers and key ports.”
“Therefore, we do not believe that this is a” full closure or nothing “scenario when it comes to water, and Iran can arrange its asymmetrical possibilities to increase the economic costs of combined US/Israel operations,” said Halima Croft from RBC, a former CIA analyst, in a note for customers.
Jordan Rochester, head of the FCC strategy for the EMEA region in Mizuho, also expressed optimism when it comes to the possibility of a strang to close the Hormus.
“This is a bold connection, but I doubt that the Hormuz Strait is blocked and we avoid oil levels worth $ 100-130 advertised by Iranian allies, such as China, which can put pressure on the maintenance of oil flows,” he said in the note on Monday morning. “The United States can also make energy infrastructure with a red line attached to the support of Israel.”
However, the key ratio of safe demand US tax market – It seems that he tells a completely different story through its extremely muted reaction.
The global crisis usually sends investors coming to the debt of the US government, but Kundby-Nielsen from Danske Bank said that “the impact on the US treasures is a bit more uncertain, taking into account a significant commercial deficit and tariffs in combination with the potential increase in treasure supply, taking into account the soft fiscal policy.”
The global trade war combines these fiscal fears.
The date of July 9 is approaching until the fee relief expires, the US threatens the tariffs to 50% of most imports from the European Union.
“As pain as the usd goes, we'd suspect that the usd would be sinking loower if it weren't for the war, largely because the news pertining to US import tariffs is not particularly good, and because data from outside the us, while not consumption to Further to Further to Further to Further to Further to Further to Further to Further to Further to Further to Further to Further to Further to Further to Further to Further to Furter Relative to the US, “Said Thierry Wizman and Gareth Berry, Macquarie's Currency and Rates Strategists, in A June to Clients that Preceded the Us Strike On Iran.
FX strategists from Bank of America also point out that investors strongly bet on the decline of the American dollar, which increases the rush to any currency movement.
According to the BFA Global Fund Minager study, published on June 16, the fund managers currently perceive short dollars as the third most crowded trade-even though the study was previously conducted to the involvement of the United States in the conflict in the Middle East.