Dollar Strength Could Unwind if Oil Prices Fall Back – Fitch
The strengthening of the dollar in the early weeks of the US-Iran conflict could unwind if oil prices fall, Fitch Ratings says.
In a non-rating commentary note, Fitch said global currency movements in recent months have been closely correlated to the relative exposures of different economies to the sharp rise in world oil prices.
Countries less exposed to the US-Iran conflict, as measured by their net petroleum imports as a share of GDP, have tended to experience less depreciation against the dollar.
Between 27 February and 24 April, the largest depreciations against the US dollar among the Fitch-20 countries were in South Africa (3.8%), India (3.3%), Indonesia (2.7%) and Korea (2.6%). Brazil and Russia saw their currencies appreciate significantly.
Beyond the Fitch-20, the largest depreciations over this period were in Egypt (9.7%), Philippines (5.1%) and Thailand (4.2%). Some countries’ currencies appreciated, notably Kazakhstan (6.8%), Israel (4.8%) and Hungary (2.3%).
FX forecasts in March 2026 Global Economic Outlook and Sovereign Data Comparator suggest that the dollar on the DXY index will further depreciate by a further 0.5% by the end of 2026.
“We expect the dollar to be broadly stable against the euro and the yuan, and an unwinding of some of the conflict-related currency movements of the past weeks”, Fitch said.
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