The conflict in the Middle East is forcing a reordering of global currency and commodity markets, lifting resource-linked currencies while testing the U.S. dollar’s traditional safe-haven role. Currencies tied to energy and raw materials exporters, led by Norway and Australia, have outperformed many major peers as traders seek exposure to energy security and critical materials.
Resource currencies gain ground
The Norwegian krone and Australian dollar have each risen more than 7% against the U.S. dollar this year, with the krone trading near 9.37 per dollar this week, its strongest level since 2022.
Norway, Canada and Australia — all net energy exporters with AAA sovereign ratings — are increasingly seen as relatively stable alternatives to the dollar and euro as global trade fragments and commodity supply becomes more politicised.
Recent moves extend a broader rally: the Australian dollar has appreciated 12.32% over the past twelve months as of 17 April 2026. The Canadian dollar has been more erratic, strengthening earlier in the conflict before surrendering part of its gains against the greenback.
Oil shock drives a new commodity order
The latest escalation has produced what analysts describe as the most severe disruption in the history of the global oil market. With the Strait of Hormuz effectively closed, Brent crude averaged $103 per barrel in March. The U.S. Energy Information Administration expects prices to peak around $115 per barrel in the second quarter of 2026.
This shock comes on top of already elevated commodity prices. Oil is hovering near $100 per barrel, copper is around a six-week high, and gold remains about 50% above year-ago levels despite a recent pullback. Bank of America data show a broad commodities index up roughly 42% so far this year, versus a 6% increase last year.
Ninety One, an asset manager, argues that a “new commodity order” is taking shape, driven by tight supply, regionalised trade flows, and the transformation of global energy systems. Energy independence and access to materials vital for electrification and AI infrastructure are increasingly seen as strategic assets, feeding into currency valuations.
Shift toward energy and metals exporters
Strategists at several institutions report rotating exposures out of the euro and sterling into currencies such as the Norwegian krone, Australian dollar, Canadian dollar and New Zealand dollar.
Norway’s role as Europe’s main gas supplier has sharpened expectations for a firmer policy stance from its central bank, underpinned by higher energy revenues. Traders see similar, though more nuanced, support for Canada and Australia as sustained oil and gas prices boost trade and fiscal positions.
Analysts say that if oil holds between $85 and $100 per barrel, energy exporters like Canada and Norway could maintain trade and budget advantages even if geopolitical tensions ease and global conditions stabilise. Positioning in these currencies has largely been maintained, with many expecting them to remain resilient in both crisis and calmer periods.
Copper, critical minerals and structural change
The strategic role of industrial metals is also deepening. In the United States, copper was added last November to the list of materials deemed essential for national security, underlining its importance for power grids, electric vehicles and digital infrastructure.
Copper prices have surged to record highs above $14,500 per tonne this year, supported by supply disruptions and forecasts of a global deficit of about 330,000 tonnes in 2026. This reinforces Ninety One’s view that supply-chain regionalisation and electrification are creating long-term shifts in how commodity-linked currencies trade.
Dollar’s safe-haven status under scrutiny
While commodity exporters have benefited from higher prices, their currencies remain vulnerable to growth risks arising from the conflict. The U.S. dollar initially rallied as the primary safe-haven asset when fighting escalated, tempering gains in the krone, aussie, loonie and kiwi.
However, the dollar’s behaviour is evolving. Analysts note that its strength now appears more tied to global funding stress and liquidity conditions than to straightforward flight-to-safety flows. Its correlation with risk assets has been changing, suggesting that its defensive qualities are becoming more conditional and context-dependent.
Hopes for a ceasefire have recently triggered modest rebounds in the Canadian, Australian and New Zealand dollars, which had weakened when hostilities intensified. Yet structural vulnerabilities remain: Australia, for example, is heavily reliant on refined fuel imports even as it is a major exporter of coal and liquefied natural gas.
Gold’s volatile response to geopolitical risk
Gold has seen pronounced volatility. Prices hit an all-time high above $5,600 an ounce in January before retreating, with moves closely tracking geopolitical headlines.
The metal did not immediately act as a haven when the conflict first broke out, reflecting competition from the dollar and shifting expectations for global interest rates. Nonetheless, institutions such as JPMorgan forecast that gold could climb to around $6,300 by the end of 2026 if geopolitical uncertainty stays elevated and real yields remain contained.
Outlook: peace talks and oil as key drivers
In the near term, market direction is expected to hinge on progress in peace negotiations. Concrete steps toward de-escalation have repeatedly reduced safe-haven demand for the greenback and supported risk-sensitive and commodity-linked currencies.
The International Monetary Fund has outlined scenarios in which a prolonged conflict could trigger a 100% surge in oil prices from pre-crisis levels, dramatically reordering global trade balances. Energy importers would face mounting external deficits and inflation pressures, while exporters would likely see stronger currencies, firmer fiscal positions and greater geopolitical leverage.
For now, traders are watching whether high energy and metals prices prove transitory or mark the beginning of a longer cycle that cements the rise of resource currencies and reshapes the global monetary landscape.
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