Why the Dollar Is Struggling While Europe Looks Strong

The U.S. and Israeli attacks on Iranian nuclear sites proved to be largely a non-event in the global markets.  Stocks shrugged off the news quickly, as did the energy markets.  Yet again, the dollar continued its pattern to not behave as a safe-haven currency except for brief moments when dollar yen rallied all the way to 148.00 before getting slammed back down below 144.00 in a matter of hours.  A few things have become very clear over the past week:  1. Iran has nearly zero interest in taking on Israel in a serious military conflict, and they have even less interest – if that is possible – in fighting the United States.  2. The U.S. may profess to be in favor of a strong dollar policy, but global investors are increasingly convinced that the dollar’s role as the global reserve currency is on the decline.  3. Investors are keen to keep buying stocks regardless of the underlying fundamental picture.