U.S. Dollar Forecast: Summer–Fall 2025
A Safe-Haven Surge Amid Geopolitical Tensions
The summer and fall of 2025 are shaping up to be a defining period for the U.S. dollar—not due to exceptional economic performance, but as a result of its enduring status as the world’s ultimate safe-haven asset. Against the backdrop of heightened geopolitical risk, particularly the escalating conflict between Israel and Iran, the dollar stands to benefit from a global flight to safety.
1. Geopolitical Tensions Drive Dollar Demand
The Israel–Iran conflict is contributing to heightened volatility in global markets, triggering a classic risk-off sentiment. Historically, large-scale Middle Eastern conflicts have led to sharp increases in dollar demand. Investors and institutions tend to rotate out of risk assets—such as equities, cryptocurrencies, and emerging market instruments—into the relative safety of the U.S. dollar and Treasury bonds.
Key contributing factors:
Soaring oil prices are forcing major importers like India and the EU to bolster