BBH reported that higher crude oil prices and rising global bond yields have supported the US Dollar, leaving it firmer against major currencies. It said Brent crude was near $104 a barrel, the highest since April 7, but below the March triple top around $120.<\/p>\n
It added that the energy supply shock remains due to the US-Iran war being unresolved. It said global bond yields are facing renewed upward pressure as higher oil prices lift expectations for central bank rates.<\/p>\n
The update said the worst phase of the energy shock is likely past. It cited the US extending the ceasefire indefinitely and outlined a navigation stance described as \u201cOpen for All or Closed to All\u201d for vessels using the Strait of Hormuz.<\/p>\n
It said this approach could speed a reopening of the Strait of Hormuz by increasing shared economic costs and incentives for a diplomatic outcome. It expects interest rate differences between the US and other major economies to keep the US Dollar Index within the 96.00\u2013100.00 range.<\/p>\n
Higher crude oil prices and rising global bond yields are currently supporting the US dollar. Recent data shows Brent crude futures are hovering around $98 a barrel, pushing central bank rate expectations higher. Consequently, the dollar is showing firmness against other major currencies.<\/p>\n
We are sticking to our view that the worst of the energy shock we experienced in 2025 is probably behind us. Prices remain well below the triple top of around $120 a barrel seen back in March of last year during the US-Iran conflict. The diplomatic channels that were opened then seem to be preventing a return to those extreme price levels.<\/p>\n
As such, interest rate differentials should continue to keep the US Dollar Index, or DXY, anchored within its range of roughly 96.00 to 100.00, which has held for over a year now. While the Federal Reserve’s latest dot plot suggests a pause, key counterparts like the European Central Bank continue to signal caution, maintaining a favorable rate differential for the dollar. For derivative traders, this suggests that strategies built around the DXY remaining range-bound are attractive.<\/p>\n
With the DXY currently trading near 98.50, selling volatility could be a primary strategy in the coming weeks. Traders might consider option strategies like iron condors or strangles centered within the 96.00-100.00 range. This approach profits from time decay and the expectation that the index will not make a significant move above resistance or below support.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Higher oil and bond yields bolster dollar; Hormuz tensions ease; DXY expected to range 96-100.<\/p>\n","protected":false},"author":103,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-48484","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/48484","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/103"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=48484"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/48484\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=48484"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=48484"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=48484"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}