Bullish sentiment in the options market hits a three-year high as the Middle East boosts the US dollar's "petrodollar" premium

Golden Ten Data reported on March 12 that the options market indicates the dollar is heading toward a new high in 2026, as the Iran war keeps energy prices elevated. The dollar spot index rose by 0.3% during early London trading, poised to record its highest closing price in nearly two months. The one-month risk reversal indicator, which measures the difference in demand for bullish and bearish dollar options against major currencies, previously climbed to 92 basis points, marking its highest level since the end of 2022. Goldman Sachs economists Manuel Abecasis and David Mericle expect Brent crude oil prices to average $98 in March and April, before falling to $71 in the fourth quarter. They predict this will significantly boost inflation, thereby delaying the Federal Reserve's first rate cut this year from June to September. This shift implies wider interest rate spreads for a longer period, a combination that typically sustains buying interest in the dollar, especially against currencies facing trade condition pressures and needing to import energy.