Bloomberg’s dollar index rose as much as 1%, biggest one-day jump since May, as the currency gained against all of its major peers. The Swiss franc and Japanese yen, both net energy importers, lost more than 1% against the US currency Monday, before paring the drop, as the US and Israeli military strikes pushed oil prices up sharply.

“The dollar is your ultimate safe haven for this conflict,” said Andrew Hazlett, a foreign-exchange trader at Monex Inc. “‘Sell America’ was popular, but now push is coming to shove. With oil and gas skyrocketing, traders are looking for a familiar and comfy spot to settle and wait things out.”

The jump came as the conflict increased inflation expectations and pushed up Treasury yields by casting doubt on whether the Federal Reserve will have room to cut interest rates further this year, given that inflation is already above the bank’s target rate. The market had largely been positioned for the dollar to drop, according to the latest data from Commodity Futures Trading Commission, though traders trimmed their bets against the greenback in the week through Feb. 24.

A sustained oil price shock is the biggest threat to JPMorgan Chase & Co’s view that the dollar will weaken this year, according to the bank’s foreign-exchange strategists.

“The escalation between the US/Israel and Iran marks a significant risk to regional stability, and FX markets are responding primarily through the energy price channel,” the JPMorgan team wrote.

In just over 48 hours since the US and Israel began striking Iran, the conflict has widened quickly. Iran continued to fire missiles at countries around the Middle East in response to the attack, which killed Supreme Leader Ayatollah Ali Khamenei over the weekend. Blasts were heard across Israel, Saudi Arabia, Qatar and the United Arab Emirates.

“What happens to the dollar in the next five years very much depends on the perceived success of this current round of engagement, given its very serious nature and the already extant ‘distrust’ of the US,” said Thierry Wizman and Gareth Berry, strategists at Macquarie.

The Iran crisis may be reviving the traditional relationship between the dollar and oil because the US is a net energy exporter. The correlation between the two turned positive on Monday.

“In a world where risk aversion is corresponding to supply-driven oil price shocks, the dollar’s safe haven allure is amplified,” said Alex Cohen, foreign-exchange strategist at Bank of America Corp. “This is in part due to the US’s status as an energy producer, as well as the reliance on energy imports by other traditional safe haven’s such as Japan and Switzerland.”

Reporting by Anya Andrianova and Carter Johnson