Credit Agricole CIB Research maintains a structural bullish bias on USD.

"We maintain a broadly constructive view on the currency from here:

We think that investors may be overly optimistic about the prospects for a quicker abatement of the Middle Eastern tensions. A continuing blockade of the flow of energy could hurt global growth prospects and erode investors’ risk appetite, in a boost to the safe-haven USD," CACIB notes.

"We expect the US economy to outperform the economies of energy importers even if the US-Iran tensions are resolved. This much could keep global equity investors invested in the US. While worries about the US fiscal outlook may resurface, the resilient growth backdrop should offset these to a degree as was the case in 2025.

We believe that the Fed would remain on hold for an extended period under Kevin Warsh because the war in Iran could keep US inflation uncomfortably high in the next 12M. Persistent stagflation risks can also make the ECB and BoJ reluctant to hike rates aggressively. The USD rate advantage and thus the costs of short-USD hedges should remain considerable," CACIB adds.