Strategists: Higher oil prices could boost the dollar

Foreign exchange strategists John Shin and Alex Cohen said that the recent rise in oil prices could push the dollar higher and pose a threat to Bank of America’s expectations that the dollar will depreciate by the end of the year. “The recent strength of the US dollar against the backdrop of rising oil prices may be due in part to the changing nature of the oil shock,” they said. Bank of America strategists remain negative on the USD medium-term and expect EUR/USD to rise to 1.15 by the end of the year, as Fed rate cuts should help cause the USD to move lower, but higher oil prices could offset the situation.