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Dollar and yields surge as oil rallies toward $100
USD/JPY climbed above 163 to fresh 40-year highs as markets repriced higher energy-linked inflation risk.
Action Forex reports that Thursday marked a broader market repricing tied to the oil rally, with Brent surging toward $100 and WTI breaking above $90. The synchronized move came alongside a sharp dollar rally, rising Treasury yields, and stocks turning lower, suggesting investors are starting to treat higher energy prices as a wider macro threat rather than a short-lived commodity move.
The catalyst was another escalation in Middle East tensions, including statements by Yemen’s Houthis that they targeted two Saudi oil tankers with drones and missiles, plus U.S. warnings that Iran would be held responsible for future Houthi attacks. The developments also followed US forces completing a twelfth consecutive night of strikes on Iran, which reinforced fears that global energy supply disruptions could last longer.
In fixed income, US 10-year Treasury yields climbed above 4.70% for the first time since January 2025, while Germany’s 10-year Bund yield rose above 3.2% to its highest level since 2011. Action Forex notes this renewed pressure for restrictive monetary policy, as higher oil prices could feed into broader inflation expectations.
In currency markets, the dollar led gains as higher yields increased its appeal, with USD/JPY moving to fresh 40-year highs above 163. Action Forex also said European stocks traded lower and US futures pointed to a weaker open, with Dow futures down more than 500 points and Nasdaq futures lower by around 380 points.
Latest closeWTI crude $87.52 ▲3.1%|Brent $94.43 ▲3.8%|Nasdaq Comp. 25,837.21 ▲1.3%