📊💱Risk Deleveraging Supporting The Dollar This Week: Cable FX Macro

• This week's dollar rally is taking most G10 currencies down as volatility spikes push flows into safe-haven assets. It's interesting to see both CHF and JPY, textbook low-risk currencies, fall to the dollar despite the escalation of tensions in the Middle East. Past vol spike episodes have seen both the franc and the yen outperform the dollar. Other assets like gold are barely working as the spot market posts losses and Treasuries remain offered this week.

• So where is this relative strength coming from? For starters, the U.S. is now an exporter of energy, and the recent spike in oil prices is punishing energy importers in the G10. Also, the dollar had been held short by market participants heading into the Iran-US conflict; more than a safe haven trade, we're looking at a deleveraging of risk positions that were short USD. The rise in tensions and the spike in oil prices squeezed these short dollar trades, pushing money to get tactical.

• In fact, a recent poll by Reuters showed that most strategists see the USD bounce as short-lived—lingering Fed cut expectations (still pricing 2 cuts later in 2026), doubts on prolonged safe-haven status, and potential conflict containment could resume downward pressure.