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U.S. military force is restoring dollar confidence, with history backing sustained strength ahead.

Research from investment bank Macquarie shows that successful U.S. military interventions can trigger enduring periods of dollar strength.

The findings come amidst market volatility spurred by the U.S. attack on Iran, now in its 5th day.

"History demonstrates that the dollar performs well when the U.S. engages successfully abroad and demonstrates leadership," says Macquarie.

An example cited by researchers is the First Gulf War of 1990-1991, which proved a clear-cut foreign policy success for the U.S. that was subsequently followed "by a decade of success for the USD."

Conversely, after the U.S. failures in the war on terror in the 2000s, Macquarie says the U.S. dollar began to lose ground.

The term "gunboat diplomacy" comes to mind; it was coined in the 19th century to describe the enforcement of Britain's global hegemony that underpinned sterling as the world's de facto global currency.

The mechanism behind the USD strength is confidence in U.S. global leadership and institutional dominance.

The dollar index - a measure of broad dollar performance and value - is now 1.0% up since Monday, but it had been as high as 2.0% at one stage on Tuesday.

Dollar gains push euro-dollar back to 1.16 and GBP/USD to 1.3378.