US stocks are rebounding, crude oil prices are falling, and gold and bitcoin are rallying. Investors are reassessing the war in Iran, expecting the worst may be over. The volatility was fun while it lasted, but now it is time to focus on the macro front, be it inflation or GDP. It would also be appropriate to take a moment and examine the status of the US dollar as the world’s safe-haven asset.
Iran to the US Dollar
The US dollar has had a rough 15 months. The greenback has weakened against a broad array of currencies in advanced economies. Dollar bears had pronounced the world's chief reserve currency dead from abandonment. Who knew that a conflict in Iran would resurrect the buck and remind the world who is top dog in the global economy?
In the fallout of Operation Epic Fury, the world jumped into a pool of dollars. The US Dollar Index (DXY), a measure of the greenback against a weighted basket of currencies such as the Japanese yen and British pound, surged more than 2% to 99.32. Additionally, the administration’s preferred trade-weighted Nominal Broad US Dollar Index, a gauge of the buck against major US trading partners, jumped 1.5%.
Now that geopolitical risks have abated slightly, investors are feeling risky again and buying the dip. This also means that the DXY is retreating. Still, the sudden surge is a stark reminder of how the world still views the Federal Reserve Note: Like a good neighbor, it is always there for those in need, especially when the world is on the brink of a major war.
Anti-America Trade
For the past year, market watchers have warned about the growing anti-America trade. This narrative was popular for the week or two following President Donald Trump’s so-called Liberation Day announcement of global reciprocal tariffs. At the time, everyone panicked about a worldwide economic collapse.
However, since then, the leading benchmark index averages have been on an upward trajectory. Appetite for US debt also remained strong, while also presenting a manageable 4% yield for US Treasury securities. The one nagging feeling in all of this was the US dollar, though it is hard to describe weakness since the index is trading firmly above pre-pandemic levels.
Maybe this is the Goldilocks zone that White House officials have been aiming for all along.
Minneapolis Fed President Neel Kashkari, for example, told CNBC in April 2025 that global investors were moving on from the United States and seeking to park their capital elsewhere.
"Normally, when you see big tariff increases, I would have expected the dollar to go up. The fact that the dollar is going down at the same time, I think, lends some more credibility to the story of investor preferences shifting.
“Investors around the world have viewed America as the best place to invest, and if that’s true, we will have a trade deficit. So now one of the ways that expresses itself is in lower yields across asset classes in America.
“If the trade deficit is going to go down, it could be that investors are saying, OK, America no longer is the most attractive place in the world to invest, and then you would expect to see bond yields go up.”
He was partially correct. International equities outperformed the US stock market in 2025 by about 15%. This was driven by various factors, including a weaker greenback. And here lies the rub: A lower buck improves returns for dollar-based investors holding foreign assets. The metals market has also risen, in part, for the same reason. A falling Benjamin, Jefferson, or Lincoln will make it cheaper for foreign investors to purchase dollar-denominated commodities.
Interestingly enough, foreign markets that have been booming have also seen conservative revolts, from Japan to Argentina and Chile. At the same time, momentum in some of Europe's economic hubs has faded in the first three months of 2026. Germany's DAX and France's CAC 40 Index are down this year, for instance.
That said, Treasury auction results indicate that foreigners are still infatuated with American assets.
De-Dollarization
Suffice it to say, there is an international appetite to shift away from the US dollar. The greenback is embedded in the world order, from the SWIFT banking system to central bank reserves, preventing a change of guard. De-dollarization has been a real initiative, but it is on a sabbatical due to Trump’s second term in the White House. It will likely restart when he leaves office in a couple of years. If it does, the anti-dollar crusade will remain a long-term commitment rather than an instant death.
As Macbeth said, "Tomorrow, and tomorrow, and tomorrow."
