The US dollar is showing signs of weakness despite ongoing geopolitical tensions and military uncertainties, suggesting a potential shift in market perceptions of US assets. According to Nigel Green, CEO of deVere Group, this move in foreign exchange markets stands in contrast to earlier phases of similar crises. deVere Group is one of the world’s largest independent financial advisory and asset management organisations. The company provides financial advice and wealth management solutions to international investors and expatriates.
At the height of escalation in previous crises, the US Dollar Index often surged as investors sought traditional safe-haven assets. Now, even tentative signs of de-escalation are met with a weakening dollar, despite continued disruptions to global energy flows through the Strait of Hormuz. Green noted that the dollar is no longer responding to geopolitical stress as markets have come to expect.
This shift is further evidenced by the behaviour of energy and bond markets. While Brent crude experienced significant volatility, global bond markets rallied, and US Treasuries extended gains following comments from Federal Reserve Chair Jerome Powell. The combination of a softer dollar, stronger bonds, and elevated oil prices represents a departure from previous crisis dynamics, where geopolitical shocks typically drove a sustained rally in the US currency.
According to Green, investors are increasingly separating short-term geopolitical headlines from longer-term macro positioning. He suggests that safe-haven demand is becoming more diversified, with investors allocating across various currencies, commodities, and fixed income rather than defaulting exclusively to the dollar. While risks remain elevated, the dollar’s behaviour signals an evolution in long-established crisis patterns within global markets.
