"This is completely normal price action, and it does mean that people still think of the U.S. dollar as a safe haven. Investors are selling holdings in overseas stocks and assets in Europe and Asia, and they're cashing out into dollars. That dynamic increased demand for the greenback, pushing up its value against other currencies."
"It's completely normal that after a year and change of Americans putting money to work overseas - and they made a ton of money off it - now they're saying, 'I'm going to lock in some gains.' And that process benefits the dollar. Oil trades on a global market, but it trades in dollars. Higher energy prices mean you need more dollars, again pushing up demand."
Oil price increases catalyzed significant global market disruption, strengthening the U.S. dollar against other currencies. Investors are selling overseas stocks and assets in Europe and Asia, converting holdings into dollars as a safe-haven asset. Rising oil prices increase dollar demand since oil trades globally in dollars. Rate differentials also contribute, as energy price increases create more inflation pressure internationally than in the U.S., which has greater insulation from oil shocks. American investors are locking in gains from overseas investments, further boosting dollar demand. This currency market reaction represents normal risk-management behavior rather than fundamental economic weakness.
Read at Axios
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