WTI at $100: Trump's China Trip Resets FX Hedges

The US dollar index itself may see mixed signals. Higher inflation supports rate expectations, which tend to lift the dollar. Trade uncertainty, however, weighs on risk appetite. (The word "however" is used mid-sentence – permitted by style.) The net effect depends on whether the market reads the China trip as disinflationary or inflationary.

For traders building a watchlist, the distinction between supply-driven and demand-driven price action matters. If the rally stems from OPEC+ cuts and geopolitical risk, the commodity currencies may lag because recession fears cap rate differentials. If the rally comes from demand optimism tied to a China deal, then CAD, AUD, and NZD could outperform. The weekly COT data will show speculative shifts in crude and CAD positioning. Use the currency strength meter to track which commodity block currencies gain momentum relative to the dollar.

Next Decision Point: Monday Open and EIA Inventory

Early Monday trading is expected to stay nervous, with WTI holding near $100.65. The key data point this week is the EIA inventory report, which will confirm whether supply is tightening beyond seasonal trends. Any headlines from Trump's China meetings could trigger sharp intraday moves.

Traders should watch for a break above $102 or a fall back below $99 to set the near-term direction. The $100 level is now the line in the sand for both energy and currency markets. A sustained hold above $100 would likely lead to a reassessment of central bank rate paths, particularly for the Bank of Canada, which faces higher inflation from energy costs. The weekly COT data next Friday will confirm whether speculative positions are aligned with the price move or stretched in the wrong direction.