(Bloomberg.com) — The Russian ruble, Norwegian krone and Norwegian krone have all been the largest beneficiaries of the surge in oil prices. Investors who bet on these currencies will find that they are more sensitive to crude oil prices when the price is between $80- $100/barrel.

The big crude exporters have refused to accept gains in Bloomberg Dollar Spot Index. Since the 3 month contract broke below $70 per barrel, their currencies have appreciated an average 3.3%.

According to a Bloomberg study, which accounts for global stock prices, and yields, the ruble increases by 2.3% when Brent rises from $80 per barrel to $100. This compares to a 1.6% increase when oil price rose from $69, to $82. When oil moves in a higher range, the currency’s sensitivity increased and appreciated by 2.3% and 1.3% respectively.   

Given that Russia, Norway and other central banks use their sovereign wealth fund interventions and central banking intervention to reduce currency appreciation during high oil revenues, the results can be surprising. Each marginal oil dollar that is spent onshore should also have a smaller impact on the real economy as well as on yields.

The U.S. has a much better oil balance than when oil prices were at their peak of $80-$100. This may reduce the negative impact of high oil prices against the dollar, but not against other currencies. Aside from that, there are concerns over stagflation due to the recent rise in oil prices. Therefore, a greater risk-aversion shock could boost dollar’s value against all assets. 

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