FXStreet reports that in the view of strategists at Danske Bank, the correlation between oil and FX majors is very low at present. 

“OPEC is widely expected to continue its slow-moving normalisation of production levels this week, following large cuts since the onset of COVID-19 in 2020. In our view, the pivot from the Fed and stronger dollar on top of rising production will keep oil around $70/bbl for Brent. In general, though, the correlation from spot oil to FX is very low currently.”

“If oil prices take a step back from these levels on the back of rising production, this is unlikely to matter much for FX. For EUR/USD, the effect on spot from rising oil prices remains quite ambiguous. There seems to be much less of a link between spot oil and the reflation theme across assets. In addition, should oil go a bit lower on the back of rising supply, such is different as when the underlying reason is a lack of demand – and especially so for the cyclical currencies.” 

“The direction of the reflation trade and Fed will continue to outshine other factors such as oil and OPEC. We remain USD positive.”