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Brown Brothers Harriman analyst Elias Haddad highlights that the US Dollar remains underpinned by geopolitical risks in the Strait of Hormuz, a critical global oil transit chokepoint. With Brent crude prices surpassing $100 per barrel and stagflation concerns dampening equities and bonds, the USD has approached cyclical highs. The analyst attributes the Dollar's strength to its role as a safe-haven asset amid energy supply uncertainties and inflationary pressures. For markets, the USD's rally reflects broader macroeconomic anxieties. Rising oil prices threaten global growth, while central banks' tightening cycles clash with inflation, creating a volatile environment for risk assets. Traders are closely monitoring how prolonged shipping disruptions in the Gulf could exacerbate energy costs and inflation, further fueling USD demand. Looking ahead, investors should watch developments in the Strait of Hormuz, OPEC+ policy adjustments, and US inflation data. A sustained USD rally could pressure emerging markets and commodity-linked currencies, while higher oil prices may trigger central bank interventions. Geopolitical tensions in the Middle East remain a key wildcard for both the Dollar and global markets.
