US Dollar Posts Best Month Since July 2025; DXY Above 100 as Safe-Haven Demand Surges

The Bloomberg Dollar Spot Index gained over 2% for March 2026 — the dollar's strongest monthly performance since July 2025 — as geopolitical uncertainty from the Iran conflict and reduced Fed easing expectations drove safe-haven demand. The DXY dollar index rose to 100.21, strengthening particularly against the British pound and Swiss franc. The paradox of dollar strength in a stagflation environment complicated Fed policy: a stronger dollar reduces import price inflation (helpful for the Fed) but tightens financial conditions for emerging markets and US multinationals. Emerging market currencies and commodity exporters faced particular pressure, adding to the risk of an EM debt stress episode on top of the US-China trade conflict.