The U.S. dollar could surge in 2020, according to a strategist from HSBC, and there are two "obvious channels" that could help it to rally.
Speaking to CNBC's "Street Signs Europe" on Tuesday, Dominic Bunning, senior FX strategist at HSBC, said the dollar's resilience amid heightened U.S.-Iran tensions showed "just how good a currency the dollar is."
"The dollar is still pretty much the pre-eminent currency safe-haven, up there with the yen, but the dollar's really what people want to own in these kind of periods," he said. "But it's also the highest yielding G-10 (Group of Ten) currency — so you get the carry that's normally associated with taking more risk, but you get the risk-off status of the dollar."
Bunning said HSBC's base case was for a resilient dollar.
"When you get these exogenous catalysts, this shows you that the dollar could potentially surge," he added. "Compared to the consensus we're definitely more bullish, and if anything we see routes where the dollar could really surge in 2020."
According to HSBC, there are "two obvious channels" that would help the greenback to rally significantly this year.
"On the developed market side if growth doesn't pick up, what are developed market policymakers going to do?" Bunning said.
He noted that central banks in those markets, such as the Reserve Bank of Australia, the Reserve Bank of New Zealand, the ECB (European Central Bank) and the Bank of Japan, were already "right at the end of their limits on monetary policy."
"They might be forced to something much more unconventional, and that tends to be currency negative, whether it's greater quantitative easing (or) buying a different range of assets," Bunning told CNBC.
"Slower developed market growth forces a much more unconventional policy response from developed markets, but the Fed still has policy room in terms of rate cuts, so the dollar rallies on that."
Alternatively, the dollar may rise on the back of economic fluctuations in emerging markets, according to Bunning.
"The other angle is the emerging markets angle, places where there's heavy positioning, where yields have come much lower so you're not getting the kind of yield buffer that you used to get — you're not effectively getting the return you need to take the risk that's still there in emerging markets," he said. "And at some point, those nominal yields look too low, there's some kind of shock, and all of a sudden you get that positioning adjustment out of emerging markets and the dollar rallies on that."
As Bunning pointed out, many strategists have expressed a differing view when it comes to their outlook for the dollar.
Speaking to CNBC's "Capital Connection" last week, Haren Shah of Taurus Wealth Advisors said he expected the U.S. currency to drift lower in the first half of this year.
Meanwhile, Well Fargo Securities' Brendan McKenna told CNBC's "Squawk Box Asia" last week that he expected the dollar to lose value in response to a slower American economy.
"We think the U.S. economy is going to slow below 2% in 2020 — on the basis of that markets are going to price in a little more easing from the Fed … that could result in the dollar starting to depreciate broadly against many G-10 and emerging currencies," he said.
"So really over the course of 2020 we have a view that the U.S. dollar broadly is going to sell off around 4% to 5%."
Steven Englander, global head of G-10 FX research at Standard Chartered, also told CNBC at the end of last year that the lender expected the dollar to weaken.