From the research: How does the change in oil prices affect the exchange rate of the euro against the US dollar?

Oil prices have diverse impacts on different agents and parts of the economy. It was demonstrated already in the second half of the 20^th century that these impacts can be extensive. After the escalation of the conflict between Russia and Ukraine in early 2022, the issue of raw material and energy prices has gained prominent attention among economic researchers.

Brůna and Tran (2023) contribute to this topic in the Energy Economics journal by investigating the impact of oil price shocks on the EUR/USD exchange rate. Based on quarterly data for the U.S. and Eurozone (2001-2021), they conclude that oil price changes contribute significantly to the fluctuations in the EUR/USD exchange rate. The exchange rate responds more intensely and less smoothly to positive oil price changes than to negative ones.

The U.S. dollar tends to strengthen against the Euro shortly after oil prices rise, indicating a comparative advantage for the U.S. in managing oil price shocks compared to the Eurozone. Find more information at: https://www.sciencedirect.com/science/article/abs/pii/S014098832300628X