During the Iran War, the USD actually strengthened. At least two reasons for that.

First, oil couldn’t flow out of the Middle East due to the closure of the Strait of Hormuz. Oil prices shot up. Oil is settled in USD—hence the term PetroDollars. Countries suddenly needed more dollars to buy the same amount of oil. The demand for USD went up, strengthening the Dollar.

Second, higher oil prices created inflationary pressure. The Fed was unlikely to cut interest rates as aggressively as initially expected. With higher rates on the Dollar, it attracted more demand for USD deposits and bonds—strengthening the USD once more.

In the short term, it’s more likely the Iran War is coming to an end, even though there’s still plenty of politicking online between the US and Iran. Oil prices are expected to come down and inflation risk lowered. USD is likely to weaken—

In the medium term, we don’t know whether the US would wage another war or Trump would unpleasantly surprise the world with another idea of his. This is the more uncertain period to gauge where the USD is headed.

In the long term, US indebtedness is an issue. I think it’s at a point of no return—and hard to unwind the debt without a very painful austerity period for the Americans that no politician would be brave enough to try. Because if you do, you lose votes and you lose the election.