The surge in oil prices could boost the euro and sterling in the near term as markets viewed both European currencies as better hedges than the dollar against lofty crude costs, analysts say.
The euro, in particular, is sensitive to oil prices because of the European Central Bank's (ECB's) anti-inflationary stance.
"The ECB is focused on the inflationary effects of high oil prices," said Mr Richard Franulovich, senior currency strategist at Westpac Banking in New York.
"The higher oil prices go, the more the ECB tends to think that it may have to lift interest rates [to stem inflation\]," he added.
That should give the euro a boost - at least against the yen.
Global investors generally buy currencies that offer high interest rates since they offer more returns on their investments.
The word in Europe, however, is that the ECB is not likely to hike interest rates even with the jump in crude costs since broader wage and inflation pressures remain subdued.
That, however, has not prevented traders from buying the euro against the yen, specifically in the past few sessions. The yen slipped about 1.5 per cent against the euro over the past four weeks.
The Japanese currency has struggled across the board, with analysts expecting Japan, which imports all of its oil, to be the most vulnerable to higher crude prices.
Soaring oil costs have helped send the Japanese stock market's benchmark Nikkei average reeling for much of the past two weeks, undermining its currency.
In the case of sterling, analysts say the case to buy it against Japan's yen is also compelling.
Britain is a net oil exporter and higher crude prices should not worsen its trade deficit in the same way it would in Japan.
Traders, on the other hand, are less compelled to buy the dollar against the yen as the Federal Reserve responds differently to higher oil prices.
"When oil prices are higher, the Fed's reaction is negative for the US economy and, therefore, it will be less inclined to hike rates," Mr Franulovich said.
The United States is the biggest net importer of oil and any spike in crude prices exacerbates its huge trade deficit.
