The US dollar is retreating for the fourth day running even as Brent tries to hold the $110-per-barrel level. FxPro analysts say the greenback is now reacting more to US equities and corporate earnings than to Middle East news.
The US dollar is losing ground for a fourth straight session while Brent crude tries to hold the key $110-per-barrel level. Oil is not lifting the greenback this time, according to the FxPro Analyst Team.
Brent was last seen at these levels in May, when significant disruptions to supplies through the Strait of Hormuz prompted a fragile and short-lived peace agreement between Washington and Tehran. Today, export volumes from the Middle East stand at 80% of pre-war levels, according to US Department of Energy estimates.
Hormuz attacks keep a risk premium in oil
A substantial geopolitical risk premium is preventing oil prices from falling. Kpler counts 18 ships attacked in the Strait of Hormuz over the past two weeks, and the Houthis' ongoing attacks on Saudi Arabia are keeping tensions high.
Supply factors also hold Brent up. Tanker traffic bound for China is rising and global stocks have fallen significantly. The IEA has announced the release of the final 100 million barrels from strategic reserves, part of the 400-million-barrel batch agreed in March.
Equities, not oil, now drive the greenback
In the recent past, the dollar strengthened during oil rallies, serving as the currency of an energy-exporting nation and as a safe-haven asset. That link has shifted, and the USD index is currently showing greater sensitivity to developments in the US equity market.
The Nasdaq-100's worst weekly performance since April 2025 triggered a plunge in Treasury bond yields amid strong demand for safe-haven assets. The likelihood of the Fed tightening monetary policy in October has also diminished. Once technology shares recovered, however, the fall in the USD index slowed.
As a result, the forex market is paying more attention to corporate earnings reports than to news from the Middle East.
Source: ActionForex
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