Dollar Rises Again on Oil Jump; Loonie Outperforms
The U.S. dollar resumed gains on Thursday, marking its third up day this week, as WTI crude surged and briefly pushed above $81 a barrel, the highest level since July 2024, before trimming part of the advance. All G-10 currencies weakened versus the greenback, though the Canadian dollar (loonie) posted one of the smallest declines, while bearish sentiment toward the euro remained elevated.
WTI climbed as much as 8.7% during U.S. trading hours as investors increasingly priced in a prolonged Middle East war that could disrupt global energy flows. Oil later pared gains in late New York trade amid reports that the U.S. Treasury may announce measures to counter high energy prices, and that Treasury Secretary Scott Bessent is considering asking China to buy less Iranian oil.
On the geopolitical front, Iran’s Islamic Revolutionary Guard Corps (IRGC) said retaliatory attacks would intensify in the coming days, while President Donald Trump said the U.S. is “doing very well on the war front,” reinforcing risk premia across markets.
The Bloomberg Dollar Spot Index rose about 0.34% as of 3:30 p.m. New York time, after climbing as much as 0.63% earlier in the session. Benchmark 10-year Treasury yields jumped five basis points to 4.15%, extending gains for a fourth straight day.
The Canadian dollar fell roughly 0.2% against the U.S. dollar, outperforming most G-10 peers on the day and holding up relatively well on a weekly basis.
The euro stayed under pressure. EUR/USD was down 0.21% to 1.1609, after falling as much as 0.64%, and remained below its 200-day moving average near 1.1672. ECB Vice President Luis de Guindos warned that a prolonged Middle East conflict could lift inflation expectations. In options markets, one-week EUR/USD risk reversals moved deeper into negative territory, trading around 1.68% in favor of puts, the most euro-bearish positioning since July 2022.
Elsewhere, EUR/GBP slipped 0.1% to 0.86887 (down for a third day this week), while EUR/CHF headed for a third straight daily decline, easing to around 0.9056. Even as traders positioned for losses in most major dollar peers, DTCC flow data suggested they continued to favor Swiss franc strength, keeping it a preferred haven.
In Asia-linked pairs, USD/JPY resumed its climb to 157.48, with a session high near 157.85, close to March’s peak around 157.97. The Australian dollar underperformed, with AUD/USD down about 0.9% to 0.7010 after dropping as much as 1.4%.
Source : Newsmaker.id
