As geopolitical tensions in the Middle East intensify, Allianz Global Investors has increased its weighting in the US dollar, capitalizing on renewed demand for safe-haven assets. The move comes amid rising volatility in energy markets and heightened risk aversion across global financial instruments.
- AllianzGI increased USD exposure by 12% in three weeks amid rising Middle East tensions
- USDJPY reached 153.80 on March 1, 2026, its highest in 14 months
- CBOE Volatility Index (VIX) rose to 31.6, its highest since late 2024
- CL=F crude oil futures climbed 8.2% to $89.40 per barrel
- S&P 500 Energy Sector fell 4.7% while LMT and RTX rose 6.3% and 5.8%
Escalating conflict in the Middle East has triggered a shift in investor positioning, with Allianz Global Investors raising its exposure to the US dollar in several global portfolios. The firm has added 12% to its USD-denominated asset allocation over the past three weeks, reflecting growing concern over regional instability and its potential impact on energy supply chains. The increased demand for the dollar is evident in currency markets, where USDJPY climbed to 153.80 by March 1, 2026, marking its highest level in over 14 months. This strength coincided with a 14% spike in the CBOE Volatility Index (VIX), which reached 31.6—its highest since late 2024—indicating heightened market unease. Meanwhile, crude oil futures (CL=F) rose 8.2% week-over-week, closing at $89.40 per barrel, as traders priced in potential supply disruptions from the Red Sea and Persian Gulf. Energy and defense stocks have been among the most affected. The S&P 500 Energy Sector Index dropped 4.7% in the week ending March 1, while defense-related equities, including Lockheed Martin (LMT) and Raytheon Technologies (RTX), saw a 6.3% and 5.8% rise respectively, reflecting speculative buying on increased military spending expectations. The strategic pivot toward the dollar underscores a broader trend of risk aversion, with institutional investors realigning portfolios to prioritize capital preservation. The move is not isolated—similar shifts have been observed in European and Asian hedge funds, contributing to a global flight-to-safety dynamic.