EUR/USD and USD/JPY Tied to Crude Oil Futures, US Yields
The EUR/USD and USD/JPY pairs are experiencing an identity crisis due to their tight link with crude oil futures, US yields, and broader FX movements.
An analysis by LSEG shows that across various time windows, there has been a strengthening relationship between Brent crude futures and the US yield curve, particularly in the belly and long end rather than front-end rates.
This connection is evident in the EUR/USD pair, which has an almost lockstep inverse relationship with shifts in US yields.