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USD: Energy shock view anchors DXY range – BBH

USD: Energy shock view anchors DXY range – BBH

FXStreetFXStreet2026/04/23 11:57
By:FXStreet

Brown Brothers Harriman’s (BBH) Elias Haddad notes that higher crude Oil prices and rising global bond yields are supporting the US Dollar (USD), with USD firmer against major currencies. However, Haddad maintains that the worst of the energy shock is likely past and expects interest rate differentials to keep the US Dollar Index (DXY) confined to its established 96.00–100.00 range.

Energy shock, yields and DXY range

"The energy supply shock lingers as the US-Iran war remains in flux. Brent crude oil prices are up near $104 a barrel, the highest level since April 7 but below the March triple top of around $120 a barrel. Global bond yields are under renewed upside pressure as higher crude oil prices push up central bank rate expectations. USD is firmer against all major currencies."

"We are sticking to our view that the worst of the energy shock is probably behind us. First, the US extended the ceasefire indefinitely. Second, the US “Open for All or Closed to All” approach to navigation for vessels transiting the Strait of Hormuz is more likely to accelerate a reopening of that crucial waterway because shared economic pain raises the incentives for all parties to reach a workable diplomatic off-ramp."

"As such, interest rate differentials between the US and other major economies should continue to keep the DXY (USD index) anchored within its nearly one-year 96.00-100.00 range."

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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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