The Euro rides a rogue Dollar as Oil maps shift

Asian equities rose in lockstep with the U.S. tech surge overnight, mirroring Wall Street’s chip-fueled champagne rally. Japan led the charge, with the Nikkei not just pressing new highs, but rewriting the record books. Under the hood? A powerful tailwind of dovish Fed bets, knockout earnings, and AI-fueled momentum that’s proving stubbornly resilient to gravity.

But equities weren’t the only market watching the chessboard. FX traders perked up at the whisper of a possible Trump-Putin meeting — a diplomatic subplot that stirs more than just headlines. The euro caught a modest bid on the potential thaw, but the real market to watch might be crude, where geopolitics has always been a more combustible catalyst.

Russia remains an oil juggernaut, and any escalation in enforcement of sanctions — particularly on flows to India — could rewire global crude dynamics overnight. Roughly 10% of global oil imports still trace back to Moscow, with India currently absorbing over 40% of that total. But India isn’t just a taker — it’s a processor, a refiner, and a clever middleman whose exports feed Europe’s tanks. If those flows were disrupted, directly or indirectly, the knock-on price volatility would be considerable. Even if that outcome remains far from base case, the mere potential reinforces the market’s hair-trigger sensitivity.

Vessel tracking data already hints at subtle re-routing: Bloomberg shows a dip in Russian barrels going directly to India, with a concurrent rise in “Other Asia” destinations. The oil finds a way — sanctions or not. That grey-market liquidity makes enforcement more illusion than reality, but even illusions can shift sentiment.

Meanwhile, the dollar’s foundations continue to show cracks. Mounting chatter over the Fed’s independence, skepticism over government-reported data, and unchecked fiscal largesse are putting the greenback on watch. The latest swirl of Trumpian unpredictability — whether aimed at the Bureau of Labor Statistics or the Eccles Building — only adds fuel to the fire. His rhetoric has revived fears of a politicized Fed and sparked wider debates about the integrity of U.S. macro stewardship.

With long-end yields drifting higher on a fatter term premium and U.S. rate cut bets creeping in through the cracks, the path of least resistance for the dollar may still be lower. We continue to like the EURUSD higher from here, with our 1.1700 weekly target comfortably within reach. A dovish Fed , gentler energy prices for Europe, and resurgent ECB credibility form a potent tailwind for the single currency — and the macro stars appear to be aligning just so.