U.S. Dollar Gains on Oil Price Rebound, Not Safe-Haven Demand, Analysts Say

Key Takeaways:

Commerzbank analysts say recent USD appreciation is driven by rising oil prices, not safe-haven flows.

Oil price rebound improves U.S. trade balance, supporting the dollar.

The dollar fell against CAD and NOK, highlighting limited safe-haven behavior.

According to ChainCatcher, analysts at Commerzbank report that the U.S. dollar’s recent strength is tied more to the rebound in oil prices than to its traditional role as a safe-haven currency, even amid rising Israel-Iran tensions.

Oil-Driven Dollar Strength, Not Risk Aversion

The analysts noted that rising oil prices benefit U.S. trade conditions, supporting the dollar selectively. On Friday, despite geopolitical escalation, the U.S. dollar index (DXY) pulled back slightly as oil prices trimmed earlier gains.

Additionally, the greenback weakened against commodity-linked currencies like the Canadian dollar (CAD) and Norwegian krone (NOK)—both of which typically rise with oil—reinforcing the view that this dollar rally is not broad-based risk aversion.