Dollar index nears 100 mark as West Asia war stokes inflationary fears
The US currency's index has risen nearly 2% in a month since the war started in West Asia.
- Mar 23, 2026,
- Updated Mar 23, 2026 11:25 AM IST
Dollar index, a benchmark to gauge sentiment in the world's strongest currency, is trading with a positive bias at the start of this week. The US currency's index has risen nearly 2% in a month since the war started in West Asia. The index was trading at 99.72 today, inching close to the 100 mark.
The dollar has proved to be a safe haven asset since the US and Israel attacked Iran in February end. Investors expect interest rates to remain high for longer due to an inflationary shock from a rise in oil prices. Interest rates on the higher end generally lend strength to the greenback.
Of late, the US currency seems to be consolidating in a range, slipping just 0.06% in five days.
The escalating geopolitical tensions have led to USD’s reserve currency status.
Meanwhile, strategists at JPMorgan Chase & Co have turned positive on the dollar for the first time in a year. They said the currency “stands out as the top defensive play across asset classes when both bonds and equities come under pressure,” according to a Bloomberg Report.
With the West Asia war intensifying, the signs of a prolonged conflict could keep energy costs elevated and stoke inflationary concverns. This has led traders to erase bets on rate reductions in the US. The possibility of rising inflation in the US has led bond traders to lift their wagers on a Fed rate hike by October 2026 to 50%.
Dollar index, a benchmark to gauge sentiment in the world's strongest currency, is trading with a positive bias at the start of this week. The US currency's index has risen nearly 2% in a month since the war started in West Asia. The index was trading at 99.72 today, inching close to the 100 mark.
The dollar has proved to be a safe haven asset since the US and Israel attacked Iran in February end. Investors expect interest rates to remain high for longer due to an inflationary shock from a rise in oil prices. Interest rates on the higher end generally lend strength to the greenback.
Of late, the US currency seems to be consolidating in a range, slipping just 0.06% in five days.
The escalating geopolitical tensions have led to USD’s reserve currency status.
Meanwhile, strategists at JPMorgan Chase & Co have turned positive on the dollar for the first time in a year. They said the currency “stands out as the top defensive play across asset classes when both bonds and equities come under pressure,” according to a Bloomberg Report.
With the West Asia war intensifying, the signs of a prolonged conflict could keep energy costs elevated and stoke inflationary concverns. This has led traders to erase bets on rate reductions in the US. The possibility of rising inflation in the US has led bond traders to lift their wagers on a Fed rate hike by October 2026 to 50%.