The conflict in the Middle East drives up the dollar and weakens the euro

In this environment, USD has been the developed currency that has clearly benefited the most, while EUR has shown itself to be vulnerable. The USD index (USD vs. basket of major currencies) has rebounded strongly from levels of 97.50 to above 100, the highest levels since spring 2025. Thus, since the outbreak of the war, there has been a sharp correction in EURUSD from levels around 1.18 to lows just above 1.14, currently trading around 1.1470.

• The main reason for the strength of the dollar was the fear and uncertainty that invaded the markets in the face of a new shock in global energy prices, reviving USD's role as a safe haven for investors (See more).  Furthermore, the United States has a structural advantage, as it is a net exporter of energy (oil and gas), so the drastic increase in energy prices is beneficial compared to other economies (See more).
• The euro's decline was due to the region's energy vulnerability, as the European economy depends on imports of oil and liquefied natural gas (such as that exported from Qatar) (link March 4). This huge increase in the price of imported energy is a severe economic blow to its terms of trade, which has dragged the EUR down (See more).

A market entirely conditioned by geopolitics and energy, in which the evolution of macro data and central banks have taken a back seat.