Global FX markets leaned toward the USD this week as high oil prices and Hormuz risk kept inflation in focus

📌 The FX market moved through a heavy event week as the Fed, BoE, BoC, ECB and BoJ all kept rates unchanged, but the overall policy tone was not soft enough to revive expectations for quick easing. Brent crude staying above 100 USD per barrel kept energy inflation at the center of the macro story, while Iran – Hormuz risk remained the biggest external variable for major currencies.
💡 The USD held a relative advantage after the Fed meeting, as the “higher for longer” message was reinforced by energy-price pressure and still-resilient US consumption data. DXY traded in a narrow range around 98–99 without a major breakout, but it still showed a stronger defensive role than the EUR and JPY during cautious sessions.
⚠️ The EUR stayed under pressure because Europe remains more exposed to an energy shock, while the ECB, despite not turning dovish, struggled to give the single currency enough support. GBP held up better in relative terms as the BoE remained firm, helping GBP/USD stand out against EUR/USD, though the broader market still favored range trading.
🔎 JPY was the most notable mover as USD/JPY moved close to the sensitive 160 area, forcing the market to reprice the risk of Japanese intervention. The yen rebounded sharply in the short term, but the recovery lacked durability as the BoJ remained cautious and the yield gap with the US continued to limit a more stable JPY uptrend.
⏱️ Commodity currencies became more divided. CAD and NOK received support from high oil prices, while AUD and NZD were less impressive due to risk sentiment and their exposure as energy importers. This pushed the market away from a simple one-way USD trade and toward relative-value setups, especially between energy-exporting and energy-importing currencies.
✅ Going into the new week, the focus remains on Iran – Hormuz developments, Brent crude levels and US labor data. If oil continues to hold above 100 USD and US data does not weaken sharply, the USD should retain support. On the other hand, a clear de-escalation signal could quickly reduce safe-haven demand and allow previously pressured currencies to recover.
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