Oil jumps & slips, dollar dips to lowest level in 3 years
Oil retreated from its surge over
West Asia tensions
as traders weigh the latest developments in the region against a risk-off mood triggered by renewed
tariff threats
from Washington. At the same time, the dollar fell to the weakest level in three years amid worries over the outlook for the
US economy
.
The Bloomberg Dollar Spot Index slid as much as 0.8 per cent on Thursday to the lowest level since April 2022. The euro jumped to the strongest since 2021, while the British pound advanced to a new three-year high. So far in 2025, the dollar is down more than 8 per cent as investors build up bets that US President Donald Trump's trade and tax policies will weigh on the economy.
The concern remains that the US could experience a spike in inflation and start sliding toward a recession amid Trump's sweeping tariffs on imports. This has investors poring over incoming economic data, especially on the labour market, to determine the path of rates in the US.
Brent slipped near $69 a barrel after jumping 4.3 per cent on Wednesday, the most since Oct, with signs the rally was overstretched. Crude shot up after Iran threatened to strike US bases if nuclear talks fell through and the US told some staff to depart the embassy in Iraq. The UK Navy issued a warning to ships sailing across the
Strait of Hormuz
, through which over a quarter of the world's oil travels.
On the trade front, Trump said he intended to send letters to trading partners in the next one to two weeks setting unilateral tariff rates, ahead of a July 9 deadline to reimpose higher duties on dozens of economies. That blunted appetite for risk assets.
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