The U.S. dollar is strong due to increased tension throughout the Middle East and central banks are eagerly watching key rates in banking and finance.

The greenback rose on Wednesday against the key currencies of the world due to geopolitical crises and interest rate expectations on uncertainty, forcing traders to seek shelter. The banking and finance industry kept abreast of the flow of events regarding the war between Israel and Iran with many investors taking a safe haven in the green bucket awaiting the decision of the Federal Reserve concerning the rates.

The dollar rose against the yen, Swiss franc and euro by around 1 percent since Thursday to shake off some recent declines tied to concerns over trade policy and a weakening U.S. economy. Market analysts opined that although structural changes are giving strong grounds to the not-so-safe-haven status of the dollar, the banking and financial world are still dominated by the dollar in terms of liquidity.

The increase of crude oil to 75 dollars per barrel also burdens net importers such as the EU and Japan as a strain against their currencies. Meanwhile, the central banks across the world, including the Bank of Japan have been keeping rates at the status quo against the backdrop of unstable world trade relations.

In banking & finance, there are expectations that the Fed will maintain rates but there is caution on the flashing lights regarding inflation and growth. With the tensions and the climb in prices of crude, the central banks of Switzerland, Britain, Norway, and Sweden will also declare whether to proceed with their policy.

In spite of this uncertainty, the dollar still enjoys the advantage of being a cornerstone of global banking and finance markets.