DXY: DBS notes a restrained safe-haven reaction to the Oil shock
US Dollar Remains Stable Amid Oil Price Surge
According to Philip Wee from DBS Group Research, even as Brent crude oil prices climbed to the USD 100–120 range during the first quarter of 2026, the US Dollar Index (DXY) continued to move within its usual 96–101 corridor. Wee explains that the subdued reaction of the US Dollar as a safe haven is due to the Federal Reserve’s less aggressive approach, tighter monetary policy compared to inflation, and waning interest in the so-called Trump Trade.
Limited Dollar Movement Despite Rising Oil Prices
Looking at the overall pattern since early 2026, the DXY Index has shown less volatility than during previous energy crises.
Although Brent crude saw a sharp increase to the $100–120 range in Q1, the DXY maintained its 96–101 range, which has been in place since mid-2025.
Wee points out that the US Dollar’s safe haven appeal during this oil price surge is noticeably weaker compared to 2022.
Unlike the situation in 2022, the Federal Reserve is not urgently responding to inflation caused by strong demand.
As a result, the DXY is not pushing above the 100 mark, with the Fed adopting a cautious, wait-and-see approach to adjusting interest rates.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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