The sovereignty of the dollar and its image of Porto Seguro had been put in check in recent months, especially after the tariff war began by former US President Donald Trump. Distrust has increased so much that last week, fund managers reduced their exposure to the American currency to the lowest level in two decades, according to Bank of America survey.
However, in the face of the recent US attack on Iran over the weekend, the dollar reacts again in global markets. THE Dxy -Index that measures the performance of the dollar against a basket of strong currencies-rose 0.50% on Monday (23). In the last five days, the advance is 1.14%.
“Last week’s gains during Israel’s attacks suggest that investors did not completely rule out the role of the dollar as a safe haven,” Standard Chartered said in a report published on Monday.
And in times of conflict, the “green” usually shines. In October 2022, eight months after the Ukraine invasion of Russia, for example, the DXY has accumulated up 12%, reaching the highest level since June 2002. This time, currency behavior can follow the same script, according to Fipecafi’s financial market expert Rogério Mauad.
The threat of Iran of close the Hormuz Strait – Where about 20% of world oil passes – in response to attacks raises the risk of a shock of offer, pressing the price of the barrel, according to the expert. This can generate an inflationary effect on a global scale and force the Federal Reserve (the US Central Bank) to resume discharge from interest to contain inflation expectations, splashing in the dollar.
“With the discharge in inflation expectations, interest would tend to go up in the United States, which would strengthen the dollar against major coins,” Mauad said. “The dollar is already rising about 1.5% over Japanese yen, as well as moving forward to the euro, pound and other relevant currencies,” he said.
Long term: limited reaction, according to analysts
Despite the risk of high oil prices and punctual appreciation of the dollar with the advancement of the conflict, some experts maintain a more cautious view on long -term impacts. Paulo Feldmann, a FIA Business School professor, evaluates that shocks in the oil market, even when they occur, tend to be resolved rapidly – limiting both inflationary effects and sustained strengthening of US currency.
“Of course, a trigger in the price of oil causes inflation worldwide, including Brazil. But in recent crises involving interruptions in production – whether due to attacks or political decisions of producing countries – the problem has resolved in a short time. It is not even in the interest of producers to maintain restrictions for a long time, as this reduces their revenues,” Feldmann explained.
Regarding the dollar, Feldmann also sees no room for a lasting appreciation. “A punctual strengthening may even occur, but should not be sustained. The American economy has given signs of weakness, and there is a risk of internal inflation in the coming months, which reduces the appeal of the dollar as a protection asset,” he said. “If there is appreciation, it should last a few days and soon return to the current level.”
In this scenario, he believes that gold can gain protagonism. “Historically, gold strengthens in times of crisis. Investors are likely to seek this safer alternative if the war is prolonged.”
Is it worth investing now?
But what all this means, in practice, for those who are in Brazil trying to decide whether or not to invest in dollars now? Remembering that last week, the currency fell below $ 5.50 for the first time since October and was still in the house of $ 5.53 on Monday.
For Rodrigo Sgavioli, XP Research allocation Head, this drop may represent a good entry opportunity – but it should not be the main factor when it comes to doloring part of the investments.
“The gearbox can function as a push, but it should not be the main factor in the decision,” he said. Most importantly, he said, is the international diversification strategy, which helps mitigate local risks and exposes the investor to different geographies.
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This international portfolio portfolio may vary from 5% to 20%, depending on the investor’s profile, according to the expert. “If the investor has already hit this level, you don’t have to expand just because the dollar has fallen. But if it is still below, it may be a good time to speed up this process.”
