🛢️💱Dollar And Yuan Most Sensitive Currencies to Crude Oil: Cable FX Macro

• The recent spark in geopolitical risk premiums has been isolated to crude oil prices so far, this isn't surprising given the importance the Middle East holds when it comes to output. However, one should ask how does the rise in crude oil affects currencies?

• The chart below shows beta for weekly changes in crude oil futures vs currency rates. A way to read this will be that the positive betas tend to be favored when crude oil rises and vice versa.

• The results of our beta study show the dollar, the krone, and the peso as the most favoured currencies to crude oil rising (positive betas). The yuan, franc, and yen stand as the most disadvantaged to rises in crude oil (negative betas).

• In line with our study results, the dollar has outperformed all of its peers since last Friday. This is due in part to the U.S. now being the world's biggest oil exporter.