Now I have the macro context. Let me write the recap.

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The Week in the Dollar

Oil’s 15% war-premium spike did what soft US data alone couldn’t — it pulled the dollar lower against every commodity-linked currency in the G10 while keeping the greenback pinned near the 100.8 handle on DXY (-0.21% for the week).

Tuesday’s US CPI print landed at 3.5%, down from 4.2% prior, and traders wasted no time unwinding rate-hike positioning. The greenback hit session lows within minutes. But the bigger story was crude: WTI ripped 14.5% to $81.77 and Brent surged 15.9% to $88.09 after Iran struck a Kuwaiti power and desalination plant and the US expanded its naval blockade near the Strait of Hormuz. That oil bid fed directly into the week’s standout FX trades — USD/CAD dropped 1.02%, USD/NOK fell 1.51%, and the Antipodean bloc caught a tailwind from the broader risk-on commodity repricing. Gold bucked the trend, sliding 1.98% to $4,023 as the safe-haven bid rotated squarely into oil-linked plays rather than metals.

Key Pair Breakdown

USD/NOK -1.51% to 9.632. Norway’s petro-krone was the week’s top G10 performer against the dollar. A 15% move in Brent does the heavy lifting — NOK correlates tightly with North Sea crude, and this week was textbook. The pair is now testing the lower bound of its June-July range.

NZD/JPY +1.46% to 94.879. The kiwi rallied on two fronts: RBNZ chief economist Conway reinforced the bank’s hawkish stance after the recent hike to 2.5%, signalling further tightening if Middle East-driven inflation persists. Against the yen — which went nowhere all week (USD/JPY flat at 162.35) — that rate differential widened fast. NZD/JPY is pressing toward 95, levels not seen since early Q2.

NZD/USD +1.43% to 0.58449. Same RBNZ driver, compounded by the soft US CPI print. The pair reclaimed the 0.5840 area and is eyeing a test of 0.5870 resistance if the rate-differential narrative holds into next week.

CAD/JPY +1.05% to 115.80. CAD strength (oil) meets JPY stagnation (Bank of Japan still nowhere near tightening at pace). The Bank of Canada held at 2.25% on Wednesday — the sixth consecutive pause — but the accompanying statement flagged 2.5% Q2 growth and core inflation near 2%, giving the loonie a stable macro floor beneath the oil bid.

USD/CAD -1.02% to 1.4018. The mirror image of the CAD/JPY trade. The pair broke below 1.41 for the first time this month. Oil at $81+ keeps the bid under USD/CAD; a weekly close below 1.40 would mark a fresh structural low.

EUR/CAD -1.00% to 1.6034. EUR/USD barely moved (+0.11%), so EUR/CAD’s decline is almost entirely a CAD story. The pair dropped a full figure as oil-linked flows favoured the loonie over the euro’s flat carry.

Week Ahead Setup

The oil premium is the variable that matters most heading into next week. If Strait of Hormuz tensions escalate further, USD/NOK and USD/CAD have room to extend — NOK especially if Brent holds above $85. If de-escalation headlines hit, those moves unwind fast; oil-linked FX rallies built on geopolitical risk rarely stick without follow-through.

NZD is the other pair to watch. The RBNZ’s hawkish lean gives the kiwi a rate-differential edge, but NZD/USD at 0.5845 is approaching resistance that’s capped prior rallies. A clean break above 0.5870 opens 0.59.

USD/JPY’s flatline at 162.35 feels like coiled energy — a week of major cross-yen moves without the anchor pair budging suggests the next catalyst (likely a BoJ signal or US data surprise) could trigger a sharp directional break. Fed commentary and any further CPI revisions will set the tone for the dollar side. The BoC’s next decision isn’t until September 2, so CAD trades on oil from here.

Bottom Line

This was oil’s week, and every G10 move of size traces back to the Strait of Hormuz escalation or the soft US CPI print — or both. USD/NOK is the pair most exposed to headline risk next week: if crude stays bid, the krone has further to run, but a ceasefire rumour could snap it back a full percent in a session.

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