Dollar rises as Middle East fighting triggers safe-haven demand
Updated
Updated · Barron's · May 5
Dollar rises as Middle East fighting triggers safe-haven demand
9 articles · Updated · Barron's · May 5
The DXY index gained 0.1% to 98.487 after Iranian strikes hit a key UAE oil port and several ships, testing a fragile ceasefire.
An Iranian commander, cited by state broadcaster IRIB, also said the US struck two small cargo boats, adding to market anxiety.
Oil prices initially jumped on inflation fears before easing, with front-month Brent crude down 0.5% at $113.86 a barrel but still elevated.
How will the UAE's historic exit from OPEC and the ongoing Strait of Hormuz crisis reshape global oil markets and geopolitical alliances?
Will Iran's new Supreme Leader and international mediation efforts bring real stability, or is a wider regional conflict inevitable?
With thousands of seafarers stranded and shipping crippled, what steps can resolve the humanitarian and economic crisis in the Strait of Hormuz?
The 2026 Strait of Hormuz Crisis: A Historic 10 Million Barrel Oil Supply Shock and Its Global Economic Fallout
Overview
In late February 2026, the US signaled a shift away from securing the Strait of Hormuz, prompting Iran to close this vital oil passage and causing a massive loss in global oil supply. This disruption triggered a sharp surge in oil prices, leading to widespread inflation and financial market turmoil. The US dollar strengthened as investors sought safety amid rising interest rates, while currencies like the Japanese yen weakened due to energy vulnerabilities and low yields. Central banks faced a difficult balance between controlling inflation and supporting growth, as the crisis accelerated energy diversification, supply chain shifts, and a lasting global economic rebalancing marked by higher volatility and geopolitical risks.