Good News Everyone! Dollar Soars... Briefly, Maybe!?

Wernstrom! A Dollar Rally?

Good news everyone! It appears that the U.S. dollar has experienced a sudden albeit possibly fleeting surge in value. Apparently some… incident involving Iran has caused investors to flock to the good ol' greenback like Morbo to a news anchor he can torment. The dollar index jumped showing gains against various currencies. But don't get too excited. This could be like that time I invented Smell O Scope; briefly exciting then ultimately disappointing due to widespread nose blindness.

Sweet Zombie Jesus! Conflict Creates Cash?

According to some eggheads at Danske Bank this Middle East kerfuffle is driving the dollar's brief resurgence. Rising oil prices falling equity prices and a stronger dollar… sounds like a recipe for disaster or perhaps a slightly less depressing Tuesday. Remember a similar thing happened when Zoidberg tried to become a comedian! Initial excitement then utter failure! Though in the dollar's case the failure may be slower and more… economic.

To Shreds You Say?

However I’m hearing whispers from the investment bank peanut gallery that this dollar strength might be as temporary as Fry’s brainwave patterns. They claim the Middle East crisis is just a smokescreen hiding deeper problems like U.S. fiscal policy trade wars and a lack of international love for Uncle Sam’s assets. The dollar is down 8% this year! Eight percent! That's like losing eight entire robot slaves! Tragic.

The Strait of What Now?

Apparently the immediate fear is that Iran might shut down the Strait of Hormuz. That's a waterway vital for oil transit you see. Though RBC Capital Markets warns it's not a simple 'all or nothing' scenario. Halima Croft a former CIA analyst thinks Iran might use its 'asymmetric capabilities' whatever that means to make things financially painful for the U.S. and Israel. Asymmetric... sounds like something I invented once! Or maybe I just dreamt it. Old age you know.

Shut Up and Take My Money (Maybe)!

Jordan Rochester from Mizuho is cautiously optimistic. He doubts the Strait of Hormuz will be blocked claiming China might pressure Iran to keep the oil flowing. He also believes the U.S. has made energy infrastructure a 'red line' in its support of Israel. Which begs the question: What color are their yellow lines? I am hypothesizing various hues to add more confusion! Speaking of a global crisis usually sends investors running to U.S. Treasury bonds. But this time the reaction is muted. Perhaps even confused like a newborn platypus. It is concerning concerning I say!

Tariffs Ahoy! and other Bad News

And then there's the looming threat of tariffs! The U.S. is threatening to slap 50% tariffs on most imports from the EU. 50%! That's enough to make even Bender reconsider his love of beer. Thierry Wizman and Gareth Berry from Macquarie suspect the dollar would be sinking even faster if it weren't for the Middle East crisis. Apparently things aren't looking too rosy for the U.S. economy though they aren't necessarily much better elsewhere. Also the current investors are betting heavily on the decline of the U.S. dollar which adds momentum to any downward move for the currency so things are not looking very good! Oh my yes!