Analysis: If the conflict in Iran ends, the risk of de-dollarization may resurface.

Nomura analysts stated in a report that global de-dollarization remains a risk, but has been temporarily halted due to the Iran conflict. They noted that major economies, including Europe and Asia, have been affected by deteriorating trade conditions and outflows of investment portfolio funds as a result of this war. These analysts claimed that de-dollarization will eventually regain momentum, citing reasons such as investor sentiment, comments from world leaders, risks of further aggressive behavior by the US, and indicators of foreign investment portfolio flows. Other potential adverse factors facing the US dollar include risks to the independence of the Federal Reserve, weakening economic prospects in the US, and increased hedging against risks of a decline in the value of the dollar. The DXY US dollar index fell by 0.1% to 98.749, with Nomura expecting a further 4% decline by the end of the year.