Analysis: If the US Announces Intervention in the Israel-Iran Conflict, the Dollar May Weaken

Mitsubishi UFJ analyst Derek Halpenny stated in a report that if the Trump administration confirms U.S. involvement in the Israel-Iran conflict in the coming days, the U.S. dollar may weaken. He noted that any U.S. intervention could accelerate the end of the conflict and reduce Iran’s incentive to disrupt crude oil supplies. This could prompt oil prices to fall and weaken the dollar. Lower oil prices would support the case for further Fed rate cuts and negatively impact the U.S. terms of trade as a major oil producer. (Jin10)