DBS Group Research’s Philip Wee notes that the US Dollar (USD) has given back most of its Iran‑war related strength, with the US Dollar Index (DXY) down this month and nearing pre‑conflict levels. He links Dollar softness to resilient equities, contained Brent prices below $100, and a growing refusal by US allies to escalate the Middle East conflict or support Washington’s blockade strategy.

DXY retreats as conflict premium fades

“The DXY Index has surrendered more than 80% of its gains from the Iran conflict.”

“The Index is down 1.8% this month to 98.1, approaching the 97.6 level before Operation Epic Fury began.”

“With Brent crude prices holding mostly below $100 per barrel the past week, markets have been holding out for a diplomatic solution, driven by President Donald Trump’s April 8 temporary ceasefire.”

“Despite the failure of the first talks in Islamabad, Trump’s decision to blockade the Strait of Hormuz has strengthened the resolve of EU nations and China to push for a diplomatic solution.”

“For now, the worst oil shock scenario appears to be partially contained, not by a lack of conflict, but by a refusal of America’s allies to escalate the Middle Crisis into a total war, which is a significant contrast to previous decades of coalition-based interventions.”

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)