De-dollarization is taking a backseat in the ongoing Israel-Iran conflict as investors are seeking a safe haven in the US dollar. The DXY index climbed above 98 after falling to 95 just a month ago. The swift rebound in value indicates trust in the currency remains intact during times of crisis.

Analysts noted that the heightened tensions have led to a renewed preference for the US dollar. Countries that initiated de-dollarization initiatives are also looking to buy US dollars. For context, China has urged State-run banks and companies to accumulate the currency to devalue the yuan.

The US dollar is now being described as the “cleanest dirty shirt” during the conflict. No other currency can take its place as a safe haven despite being fierce competitors through de-dollarization. The euro, pound, yuan, and yen fold under pressure when the markets come under pressure. The USD can withstand the whiplash of the financial market and has stood tall even after seven decades.

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US Dollar Rises: De-Dollarization in the Back Seat

This puts the US dollar ahead of its peers as no viable alternative exists in the market. Even the de-dollarization agenda could not lead the way for a new currency to be a challenger. The franc has also weakened after the Swiss National Bank intervened to counter a “rapid and excessive appreciation” of the currency. The euro edged up 0.2% to a day high of 0.9098 against the franc on Wednesday.

“In view of international developments, our willingness to intervene in the foreign exchange market has increased,” the central bank said in a statement. “We are prepared to intervene in the foreign exchange market to counter a rapid and excessive appreciation of the Swiss franc (against the US dollar), which jeopardises price stability in Switzerland,” the SNB said.