The escalation of tensions between Israel and Iran has driven the US dollar to rise despite weak economic data, challenging traditional market logic. On Tuesday, the Dollar Index (DXY) jumped 0.74% to reach 98.85, the highest level in 4 days, supported by demand for it as a safe haven due to fears of direct US military intervention in the region.
Notably, markets ignored weak retail and industrial production data, highlighting the dominance of geopolitical factors in investment decisions currently. Even the decline in US yields did not stop the rise of the dollar, reflecting a radical shift in investors' strategies towards hedging rather than economic analysis. This situation underscores how conflicts can reshape the financial landscape in ways that exceed traditional expectations.
