Dollar's Recent Rally May Be Short-Lived, Says Mitsubishi UFJ Analyst

The recent rebound of the U.S. dollar might be temporary, according to Lee Hardman from Mitsubishi UFJ Bank. According to Jin10, Hardman suggests that the ongoing U.S.-Iran conflict is expected to last weeks rather than months, which could lead to the dollar peaking in the short term and reversing from the second quarter. He notes that the conflict has driven up oil prices and boosted the dollar due to the U.S.'s energy independence and reduced expectations for further Federal Reserve rate cuts. However, Hardman points out that if energy prices decline, the Federal Reserve may still have room to cut rates in the latter half of 2026. Additionally, he highlights that U.S. policy uncertainty may remain high.