The prolonged Middle East conflict may shake the safe-haven status of U.S. dollar assets

The spillover effects of the Israel-U.S. conflict are becoming increasingly evident, with geopolitical risks now a key variable influencing global asset pricing, potentially accelerating the rebalancing of global asset allocation. In this process, the uncertainty surrounding the performance of U.S. assets is increasing, and their traditional safe-haven attributes are beginning to be questioned more and more. Market analysts believe that if the Middle East conflict continues to drag on, combined with factors such as significant U.S. exposure to risk in the war zone, rising international energy prices disrupting the Federal Reserve’s policy adjustment pace, and increased structural risks in the U.S. financial markets, the safe-haven status of U.S. assets may be undermined accordingly. (Xinhua)