For a few weeks in February and March, currency strategists watched what looked like a controlled experiment. As military conflict engulfed the Middle East, oil ripped from $65 to $112, equities sold off, and the US dollar rallied.
By any textbook reading of the dollar smile, the currency had behaved exactly as the script demanded. Indeed, as the ceasefire took hold and oil fell back below $100, the dollar resumed its pre-war drift.
Theory holds that the dollar appreciates when US growth booms
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