Foreign exchange markets are experiencing heightened volatility as the US dollar climbs to its highest level in a month, driven by a surge in safe-haven flows following fresh escalations in the Middle East.
Investors are increasingly positioning defensively, seeking refuge in the greenback as geopolitical risks intensify and disrupt traditional currency correlations.
The dollar's strength comes amid broader divergent trends across major currencies over the past 12 months.
Market participants are scrambling to protect portfolios against sharp swings, with wealth managers warning that the current environment demands more active currency risk management than in recent years.
The shift reflects a broader move toward defensive positioning as uncertainty clouds the outlook for risk assets.
This repricing of currency risk coincides with other shifts in global capital flows.