US Dollar Reaches Key 100 Mark as Energy Crisis Fears Intensify

The US Dollar Index (DXY) climbed to the important 100.00 psychological threshold on March 13, marking its highest level since November 25, 2025. The greenback's advance has been primarily driven by its role as a safe haven asset amid the global energy crisis, as well as rising inflation and global interest rate expectations.

Energy Crisis Concerns Support the Dollar

The US Dollar has the potential to post its second consecutive weekly gain, rising more than 2% since the outbreak of the Iran war in late February.

While geopolitical tensions in the Middle East often trigger only temporary risk-off sentiment, the ongoing blockade of the Strait of Hormuz has raised fears of a deeper and more prolonged global energy crisis.

This uncertainty has prompted investors to sell off stocks and various other risky assets. Currencies from energy-importing countries are also under pressure as rising oil prices could worsen their trade balances. Among those affected are the Euro and the Japanese Yen.

The EUR/USD pair has dropped to a seven-month low, while USD/JPY has surged to its highest position since July 2024. On the other hand, the dollar continues to strengthen as the favored safe haven amid the global energy crisis.

Rising Inflation Risks in Focus

Analysts are increasingly concerned about the broader economic impact of higher crude oil prices. A sustained surge in energy costs could lift inflation expectations and complicate the global economic outlook.

If inflationary pressures rise due to the energy crisis, central banks may raise interest rates to control it. Such a scenario could place additional strain on global growth as economies face the dual pressure of higher fuel costs and rising borrowing rates.

Wolf von Rotberg, an equity strategist at Bank J. Safra Sarasin, warned that prolonged geopolitical tensions could keep oil prices elevated and amplify their impact on inflation and economic activity.

Market participants are now awaiting policy meetings from five major central banks next week. They will closely observe how policymakers assess the impact of rising energy prices on inflation, economic growth, and interest rate direction.

Officials at the Reserve Bank of Australia have already floated the possibility of raising interest rates to counter inflation risks. Meanwhile, other major central banks—including the Federal Reserve, Bank of Japan, European Central Bank, and Bank of England—have not yet provided clear policy signals.