Investors around the world are flocking back to the US dollar in a bet that the AI boom will help the world’s biggest economy to outshine its peers this year and force the Federal Reserve to keep interest rates high.
Wagers on a stronger dollar in the futures market last week rose by the most since 2018 to their highest level in more than a year, according to data from the Commodity Futures Trading Commission, a jump JPMorgan analysts attributed to investors’ renewed belief in “US exceptionalism”.
The currency has risen more than 2 per cent against a basket of peers since the start of the war in Iran, as investors predicted the US economy was better placed to weather a jump in energy prices than rivals in Europe and Asia. But the prospect of an end to the conflict has weakened it only slightly, as markets turn their attention to the strength of the US economy.