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EUR/USD rebounds above 1.15 as Brent falls from past $100 peak
EUR/USD recovered to above 1.15 while Brent reversed to about $80, even as traffic through the Strait of Hormuz fell close to zero since mid-July.
Investors are weighing resilient growth data against renewed uncertainty from Middle East shipping. Action Forex said recent PMIs point to strength particularly in the US and Asia ex-China, with Europe lagging, even as the Middle East ceasefire situation has deteriorated.
Oil moves have been a key driver for currency sentiment. Action Forex noted Brent briefly peaked above $100 following the Houthi announcement of opening a second front in the Bab el-Mandeb strait, but fell back this week after reports that Iran and Oman reached an “in principle” agreement to reopen the Strait of Hormuz.
The forex reaction came despite continuing operational constraints. Action Forex said Iran and Oman agreed they could reopen the strait for a 2-4 month period with Iran maintaining significant control, but the US had not given a green light and traffic is unlikely to restart immediately. It also reported Strait of Hormuz traffic has fallen close to zero since mid-July, while Bab el-Mandeb volumes dropped but did not collapse.
Action Forex also linked broader commodity market dynamics to the same geopolitical backdrop. It said China’s oil imports have fallen sharply, demand destruction is helping rebalance crude, refining margins remain elevated amid refinery access issues, and low gas inventories in central Europe point to elevated prices going into winter.
Latest closeWTI crude $78.07 ▲3.8%|Brent $83.46 |EUR/USD 1.152 ▼0.3%