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Oil gains stoke central bank tightening expectations, Scotiabank says
Scotiabank links the oil rally to worsening US-Iran talks after President Trump rejected an Iranian proposal to reopen the Strait of Hormuz.
Scotiabank’s FX strategy team, via FXStreet, highlighted oil as a key driver in currency markets, pointing to recent oil gains tied to deteriorating US-Iran negotiations.
The bank said the extent and duration of higher energy prices will matter for central bank policymakers, helping to push expectations toward firmer tightening across major developed economies.
In a separate FX comment in the same FXStreet piece, the outlet noted AUD/USD hit nine-week lows below 0.7000 after traders digested remarks from Reserve Bank of Australia Governor Michele Bullock following the RBA’s widely expected cash rate increase to 4.6%.