Jury still out on dollar impact of pricey oil

Soaring world oil prices should damage the dollar, investors bet on Tuesday. But are they right?
Only last week many market participants believed that the dollar should benefit from a global flight from riskier assets that was sparked by uncertainty over fuel costs and their impact on the global economy.
But doubts about such benefits have crept into the market this week, showing that the long-term effect on currencies of the oil price's rise to 21-year records is far from clear.
One key question for the dollar is whether high fuel prices will hamper flows into equities or bonds needed to cover the US current account deficit.
Another is whether the European Central Bank will be more hawkish than the Federal Reserve in countering any inflationary pressure from high energy costs.
Much will depend on how many investors still have large holdings of riskier assets that tend to be sold for dollar investments in times of uncertainty and on how US consumers react to costly fuel, analysts say.