Decoded No. 15: The Dollar as a War Asset (full note, PDF)

Decoded, analysis note No. 15. Driss EFFINA, PhD. October 2026. PDF, 27 pages, 14 charts and diagrams, 9 tables.

The war involving Iran that began with US and Israeli strikes on 28 February 2026 and closed the Strait of Hormuz for most of the following eight months was, among other things, a currency event. Between the close of 27 February and 16 October the Federal Reserve’s nominal broad dollar index rose 3.0 percent, reversing part of an 8.5 percent fall over the previous thirteen months. The euro lost 5.0 percent against the dollar, the Canadian dollar 3.7 percent, the yen 1.2 percent and sterling 0.9 percent.

Inside the full note:

• The setting: from a falling dollar to a war bid
• Event study: what each war date did to currencies
• A new sign: oil and the dollar move together
• Decomposing the moves: rates, oil and risk
• War betas: the sensitivities that changed
• Safe haven or not? Dollar, franc, yen and gold
• Dollar funding: the stress that did not come
• The inflation cost of weaker currencies
• Scenarios to end-2027
• Leading-indicators dashboard
• Implications for central banks, investors and firms
• What to watch

Read the free preview: The Dollar as a War Asset.