USD: Range retest as crude risk premium fades – BBH
Brown Brothers Harriman’s Elias Haddad notes that markets have sharply reduced the crude Oil war risk premium after comments from President Trump, triggering a pullback in the Dollar and a rally in global stocks and bonds. With narrowing rate differentials versus other major economies, BBH sees the Dollar poised to revisit the lower end of its June 2025 trading range.
Dollar softens with narrowing rate spreads
"Setting geopolitics aside, USD is poised to re-test the lower end of its range seen since June 2025, reflecting narrower rate differentials between the US and other major economies."
"Nevertheless, energy markets remain extremely headline-driven, with the safety of shipping through the Strait of Hormuz the primary barometer for global energy risk."
"Markets slashed the war risk premium in crude oil prices, sparking a USD pullback against most major currencies, and a rally in global stocks and bonds."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)