Analysts: Short-lived Conflict May Limit Upside for Dollar Index, Strait Blockade Remains Biggest Variable

Odaily News Ebury strategist Matthew Ryan stated in a report that if the Middle East conflict is relatively short-lived, there may be limited room for further gains in the US dollar's recent rally. He noted that markets are currently pricing in a conflict lasting about one month based on signals from Trump. Under such circumstances, the dollar's appreciation should be constrained, and a pullback is likely to follow once the conflict ends. However, broader regional involvement and a sustained blockade of the Strait of Hormuz "pose clear risks." He believes this would lead to a further surge in oil prices, thereby boosting the US dollar and weighing on risk-sensitive currencies. (Jin10)