Due to "prudent insurance", JPMorgan Chase sees the dollar favorably for the first time in a year.

As Middle East wars drive up energy costs and threaten global economic growth prospects, J.P. Morgan foreign exchange strategists are bullish on the US dollar for the first time in a year. "Time has become the enemy of macroeconomic prospects: the longer energy prices remain high, the deeper and more enduring the market drag," wrote the J.P. Morgan team led by Meera Chandan and Arindam Sandilya in a report on Friday. "With pressure on both the bond and stock markets, the dollar has become the best defensive choice among all asset classes." In just two weeks, oil prices surged to historic levels following US and Israeli airstrikes on Iran, completely overturning investors' expectations for inflation and economic activity this year. While the dollar strengthened against 16 major currencies tracked by Bloomberg, US bonds and stocks fell simultaneously. Analysts pointed out that the potential closure of the critical oil shipping route Strait of Hormuz was a key factor in J.P. Morgan's shift in position on the dollar. Economies closely linked to global oil prices, such as the US dollar, Canadian dollar, and Australian dollar, have outperformed other currencies since the outbreak of war. The euro and currencies in Asia face the greatest risks.