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Forex strategists in a Reuters poll indicate that the recent surge in the US dollar following the escalation of conflict with Iran is unlikely to persist. The dollar initially gained strength due to geopolitical tensions and a flight to safety, but analysts argue that underlying economic fundamentals and Federal Reserve policy will eventually temper its rise. The EUR/USD pair has been particularly affected, with traders closely monitoring central bank interventions and oil price movements as key drivers. The dollar's volatility impacts global markets, especially for Gulf investors who rely heavily on forex exposure for trade and investment. A prolonged strong dollar could pressure emerging markets and increase import costs for oil-dependent economies in the Middle East. Traders are advised to watch the Fed's stance on interest rates and Iran's nuclear negotiations for potential turning points. Looking ahead, strategists suggest the dollar may face resistance if the conflict de-escalates or if the Fed signals dovish policy. Key indicators to monitor include the US non-farm payrolls report and OPEC+ oil production decisions. The gold market is also under scrutiny as a hedge against dollar uncertainty.
