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Brent crude broke below the $100 per barrel mark after Saudi Arabia successfully restarted its East-West Pipeline. The pipeline is capable of rerouting up to 4 million barrels per day—approximately 4% of global oil supply—around the strategic Strait of Hormuz. Additionally, sentiment eased following comments from a senior Iranian official hinting at the potential reopening of Hormuz within seven days if US military pressure subsides.
Despite the significant drop in energy prices, major foreign exchange pairs failed to exhibit standard correlations. The Canadian Dollar did not show broad weakness as typically expected during an oil sell-off, while the Australian Dollar and New Zealand Dollar diverged sharply without a clear economic catalyst. Meanwhile, the US Dollar maintained its overall strength across currency heat maps.
Traders are closely watching how energy supply developments and Middle Eastern geopolitical headlines interact with foreign exchange volatility. The decoupling of commodity currencies from crude prices suggests that broader macroeconomic factors, interest rate differentials, and global risk sentiment currently dominate foreign exchange trading decisions.
