WEEKLY OUTLOOKCAD/JPYOANDA:CADJPYAllFatherOdinlooking at all 6 diff pairs for a play this week. How the war ignited the dollar The DXY surged to 99.695 on March 9 — a multi-month high — as the outbreak of the Iran war dashed hopes for Fed rate cuts and sent oil spiralling. Before the conflict, the dollar was down 0.7% in 2026 after falling 9% in 2025. The war flipped that narrative completely. The dollar's safe haven status was immediately validated — the euro dropped to a three-month low of $1.1505, GBP fell 0.5%, and the yen weakened as investors piled into the greenback. As one Monex trader put it, the dollar always plays well as a safe haven in a world of chaos, and even more so when the US displays military strength. Why oil = dollar strength now The critical shift is that the US is now a net energy exporter and the world's biggest oil producer — meaning high oil prices are no longer a headwind for the dollar, they're arguably a tailwind. High oil prices sap growth in Europe and Asia far more than they hurt the US, weakening their currencies relative to USD. Iran's closure of the Strait of Hormuz — through which one-fifth of global petroleum and one-quarter of global seaborne oil trade flows — has been described as the world's largest supply disruption since the 1970s energy crisis, keeping upward pressure on both oil and the dollar simultaneously. Fed repricing — the key dollar driver Rate cut hopes have been completely wiped out. As of March 12, traders were no longer pricing in a full quarter-point cut this year. With the hawkish Kevin Warsh now leading the Fed and energy inflation accelerating, the bar for cuts has moved significantly higher — and a higher-for-longer Fed is the most powerful tailwind USD has. The two-year US Treasury yield jumped 7.7 basis points as markets repriced Fed expectations. Meanwhile markets have priced in rate hikes from both the ECB and Bank of England — compressing the dollar's rate differential advantage slightly, but not enough to derail the safe haven bid. 3 outcome scenarios for USD Scenario 1 — Protracted war: Persistent $100+ oil, sticky inflation, no Fed cuts, safe haven flows continue. Dollar stays strong, potentially pushing DXY toward 101–103. Most bullish USD outcome. Scenario 2 — Swift resolution: A quick end to the conflict would hurt the dollar significantly — oil collapses, rate cut bets return, risk appetite surges. EUR/USD and GBP/USD would rally hard. Analysts say this is the biggest short-term risk to any long-USD position. Scenario 3 — Growth shock dominates: Goldman Sachs warns that if markets shift focus from inflation to growth concerns caused by the war, dollar appreciation could fade even without a ceasefire — as a weakening US economy would ultimately force the Fed's hand regardless of oil prices. Bottom line: Analysts expect the dollar to be pinned roughly between the high 90s and low 100s on the DXY for the foreseeable future — supported by safe haven flows and a hawkish Fed, but capped by the risk of a sudden ceasefire or a growth slowdown. The war has fundamentally reset 2026's dollar narrative. Most pairs — GBPUSD, AUDUSD, EURUSD — face a USD headwind until there's a credible peace signal.