Core FO View

The Macro Stays Tilted Pro-Dollar

The market remains caught between two competing forces: strong earnings momentum on one side, and a renewed inflation impulse from oil, geopolitics, and sticky rates on the other. This week's breakdown leans toward a constructive USD bias, particularly against currencies more exposed to weaker growth, energy-import pressure, or softer central-bank credibility.

The renewed surge in oil is the central development. Reuters reported Brent crude above $111 and U.S. crude around $100, with energy supply concerns linked to the ongoing Iran conflict and Strait of Hormuz disruption. This is no longer just a fuel-pump story — it is a broader inflation transmission story. Higher crude feeds into freight, airline fares, food packaging, plastics, household goods, pharmaceuticals and business input costs, creating a second-round inflation risk that delays the Fed.

The chart below shows the Brent spike — the inflation pressure point that keeps the Fed cautious and the dollar bid.