EUR/USD dropped below 1.15. We analyze dollar strength, the Iran war's currency impact, and forecasts for the rest of 2026.
The Dollar Index (DXY) rose over 5% in March, testing the 100-100.5 level. EUR/USD dropped to around 1.15 - its lowest since last July.
The reason? The classic flight-to-safety mechanism. When the world is scared, capital flows to the dollar.
Armed conflict = uncertainty = demand for the dollar as the global reserve currency. This pattern has repeated for decades.
Oil is denominated in dollars. When its price rises, so does demand for dollars needed to purchase it. It's a mechanical reinforcement effect.
The Federal Reserve paused its rate-cutting cycle. Higher rates in the US vs. potential cuts in Europe = stronger dollar.
Paradoxically, most major banks expect dollar weakness in the second half of 2026:
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Market data as of publication date. Past performance does not guarantee future results.
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