Investing.com -- The U.S. dollar is being seen as the sole reliable refuge in global foreign-exchange markets as geopolitical risks rise, according to a new note from Bank of America.

Analysts led by Adarsh Sinha said quant models show investors are increasingly preparing for a “longer war and higher energy prices,” with market positioning shifting decisively toward the dollar.

BofA wrote that “USD should be the main beneficiary,” noting that bullish signals have been “triggered vs all other perceived ‘safe havens.’”

Option-flow data show “high demand for USD calls vs all other perceived ‘safe havens,’” reinforcing what the bank describes as a broad repricing across FX.

The bank said risks tied to the war in the Middle East are rising sharply.

“As the war in the Middle East enters its 3rd week, the risks of a more protracted conflict and permanently higher energy prices have increased meaningfully,” the analysts wrote, adding that markets had been “slow to price in such a scenario” but that repricing “is under way that should support further USD strength.”

BofA’s technical models now flag bearish continuation signals for the Swedish krona and New Zealand dollar.

The bank said SEK and NZD “tend to sell off on macro shock events,” and its “FX Signal of the Week” recommends bullish USD/SEK and bearish NZD/USD positions.

Even traditional safe havens are weakening. “EUR and JPY have also been in supported downtrends vs the USD for several weeks, and even the mighty CHF has lost its uptrend,” BofA said.

“Until de-escalation is clear,” the bank concluded, “it seems like USD will reign supreme.”