Dollar's Strength Is More Than Haven Bid: 3-Minute MLIV

Geopolitical Risk Assessment - The market currently perceives no significant tail risk, with Iran unlikely to disrupt global trade substantially [1] - The market is trading the situation as a successful US intervention, ending uncertainty around Iran's nuclear program [2][3] - The key market concern is a sustained blockage of the Strait of Hormuz, which would disrupt regional oil flow and affect the global economy [5][6] Market Reaction and Trading Strategy - Macro traders are closely monitoring the situation, but the market's reaction will be subdued unless there is a significant event [2][4] - Any headline other than a sustained Strait of Hormuz blockage will likely cause a temporary risk-off reaction that will be faded [6] - It is sensible to trade based on the current narrative until a development changes the situation [3] Dollar as a Safe Haven - The dollar is experiencing a slight haven bid due to marginal de-risking and deleveraging into the world's reserve currency [9] - The US benefits from higher oil prices as the world's largest oil producer, which supports the dollar [7][8] - The dollar's slight increase should not be mistaken for a major haven bid, as gold and treasuries are lower [10]