06:56 AM EDT, 06/16/2025 (MT Newswires) -- The escalation in Middle East tensions has put oil prices back in the spotlight and raised questions about its foreign exchange impact, said Deutsche Bank.

To better understand this link, the bank analyze the energy trade balance of countries against their historical oil/foreign exchange correlation.

Deutsche Bank should expect that economies with a positive energy trade balance should see their currencies benefit from the shock to oil prices.

The bank's analysis shows that's the case for Norway's krone (NOK), Colombia's peso (COP), the Canadian dollar (CAD or loonie) and to a lesser extent, the broader US dollar (DXY) and Brazilian real (BRL). Notably, the US dollar is in this category, highlighting how the United Sttaes has moved from a net energy-importer to a net exporter in recent years.

Conversely, countries that are net importers of energy should see a negative terms of trade shock, associated with a negative impact on their currencies, stated Deutsche Bank. That's the case for most currencies in the bank's sample, with Japan's yen (JPY), Singapore dollar (SGD), peso of the Philippines (PHP) and South Korea's won (KRW) standing out in this quadrant.

Interestingly, the Australian dollar (AUD) and Indonesia's rupee (IDR), despite having a positive energy balance, have a negative correlation between oil and foreign exchange performance.

In the case of AUD, markets may underappreciate how much of an energy exporter Australia has become recently, pointed out the bank.

On the other hand, currencies like the Swiss franc (CHF) and Mexican peso (MXN) usually perform well in an environment of higher oil prices, even when they are net importers of

energy, added Deutsche Bank.