Markets after the war

The Dollar Outlook After The War

Broad Dollar Weakness

FX Daily: Bumpy de-escalation

What's next for the USD after Middle East tensions ease?

The desk posits that the recent rebound in the US dollar may signal the beginning of a broader recovery rather than merely a temporary pause in its downward trend. Per the full note from MUFG EMEA, the dollar's sharp reversal after hitting new year-to-date lows suggests underlying factors that could support its strength in the near term. This view is bolstered by a lack of high-impact events on the calendar, allowing market sentiment to dictate USD movements more freely. As traders assess the geopolitical landscape, particularly the easing tensions in the Middle East, the dollar's trajectory will likely be influenced by shifts in risk appetite and economic data releases.