Dollar falls at record pace since February on expectations of renewed oil supplies

The dollar on Monday, March 16, is declining at the fastest pace in more than a month, Bloomberg writes. Expectations of the resumption of shipping through the Strait of Hormuz, which is key to oil supplies, led to a fall in oil prices and weakened demand for the U.S. currency.

The dollar index from Bloomberg, reflecting the dynamics of the U.S. currency against a basket of ten major currencies, fell in trading on March 16 by 0.6% - this is its strongest decline in a single day since February 9. At the beginning of the day the index was at the highest level since the beginning of 2026.

The pressure on the dollar increased after the decline in oil prices: the cost of the American grade WTI fell below $93 per barrel. As Bloomberg notes, investors are hoping for a possible restoration of shipping through the Strait of Hormuz - a key route for oil supplies to world markets. U.S. President Donald Trump has demanded that other countries do their part to protect the Strait of Hormuz, which remains effectively closed to oil tankers, Bloomberg notes.

According to analysts, since the U.S. and Israeli strikes on Iran on February 28, oil prices and the dollar exchange rate have been moving in sync. This actually turns the U.S. currency into an "oil" currency, given the status of the U.S. as the largest oil producer and the dollar's role in the global commodity trade, Bloomberg writes.

"The oil market continues to set the tone for the currency market, with Brent down slightly amid moderate optimism about passage through the Strait of Hormuz," Bloomberg quoted Bank of America strategist Alex Cohen as saying.

"As the war with Iran continues, oil prices are driving sentiment and headlines from the Strait of Hormuz are influencing markets," Bloomberg quoted Bob Savage, BNY's head of market strategy, as saying. - This week's concerns are about how central banks will handle these issues."

This week investors are also waiting for the decisions of several leading central banks on rates. The US Federal Reserve, the Bank of England, the European Central Bank, the Bank of Japan and the Bank of Australia are expected to make a decision.

This article was AI-translated and verified by a human editor