Dollar's Safe Haven Resurgence Amid Middle East Tensions

The dollar experienced a significant rally on Friday as global investors sought refuge in safe-haven assets after Israel launched extensive strikes against military targets in Iran, prompting retaliatory action. This heightened geopolitical tension has driven a surge in the dollar, gold, and U.S. Treasury bonds.

In the foreign exchange markets, the dollar gained nearly 0.6% against a basket of major currencies, reversing the earlier appeal of the Swiss franc and Japanese yen. Analysts suggest this marks the dollar's return to its traditional role as a haven amid global instability.

Despite Friday's gains, the dollar index is poised for a weekly decline, reflecting ongoing uncertainty surrounding international trade and inflation. Upcoming central bank meetings, particularly the Federal Reserve's interest rate decision, are expected to further influence market trends.

(With inputs from agencies.)