Oil prices are hovering near record highs, but you wouldn't know it by looking at the foreign exchange market.

Currencies once considered vulnerable to high oil costs have gained in recent weeks, while those of oil-exporting countries such as Canada have lost value even as oil prices hit a new high above $75 a barrel.

Analysts say that's because robust global growth, not tight supplies or geopolitical jitters, is driving oil higher, which means investors will have to adopt new strategies for trading so-called petro-currencies.

The bottom line is the old world view of oil and its effect on FX has to be reevaluated, said Boris Schlossberg, senior currency strategist at Forex Capital Markets in New York.

Mansoor Mohi-udden, a currency strategist at UBS in London, said demand-driven oil prices mean investors should consider trading currencies in a contrarian manner and look favorably on 'growth' currencies like Asian exchange rates, even when such countries have high oil import bills.

Indeed, as Schlossberg pointed out, oil at $75 a barrel has not stopped the Japanese economy from performing well, nor has it unduly affected the habits or confidence of the U.S. consumer.

Japan, the world's second largest economy, imports virtually all its oil, which would suggest higher oil prices would weigh on the economy and the yen.

What we're starting to see now is how much more accustomed the world is to high oil prices, said George Davis, technical strategist at RBC Capital Markets in Toronto. Oil above $70 a barrel doesn't shock us.

That leaves investors to focus on growth and interest-rate differentials rather than the previously perceived negative effect of the black gold on currencies.

The Canadian dollar, Schlossberg said, is a case in point. The currency has decoupled from oil prices over recent weeks and tumbled nearly 1 percent against the U.S. dollar on Tuesday when the Bank of Canada kept interest rates steady at 4.25 percent.

The U.S. dollar, meanwhile, is benefiting from interest rates at 5.25 percent, which are expected to rise by at least another quarter percentage point before the Federal Reserve ends a tightening campaign now at two years and counting.

SLIP SLIDING AWAY

On Tuesday the Canadian dollar fell to a near three-month low against the U.S. dollar, while on Monday the Japanese yen hit a one-month high against the greenback.

These moves came only days after oil hit all-time highs. Last Friday, U.S.-traded crude futures traded as high as $75.78 a barrel.

Yet more traditional relationships between currencies and oil - where oil-producing countries enjoy rising inflows from high prices while importer nations need more foreign currency to buy energy - may yet be reestablished.

In Russia, the world's largest oil-producing nation along with Saudi Arabia, the higher oil climbs, the faster the country's fiscal situation improves. This is a positive for the rouble, analysts say.

Dennis Gartman, an independent analyst and author of The Gartman Letter, said he's skeptical about adopting too single-minded a focus on one variable when investing in currencies.

I'm amused at how slavish people get about watching interest rate differentials. If that were all that mattered, I'd be long the Zimbabwe currency, he said.

At well above 1,000 percent, inflation in the African country is the world's highest and obliterates any yield advantage the Zimbabwean dollar may get from high interest rates.

And while today's more fuel-efficient cars and more productive firms have dulled the pain of higher energy prices, Gartman said potential supply disruptions and geopolitical risks from Mexico to Iran still exist in the energy sphere.

Davis, of RBC Capital Markets, said a big test will come at the height of the U.S. hurricane season, usually around August and September.

A surge in oil prices as a result of supply disruptions indeed favors adopting the conventional foreign exchange logic of buying currencies of oil exporters against those of importers, as happened last year when Hurricane Katrina battered the U.S. Gulf Coast.

So far, though, there's little sign that higher interest rates or higher oil prices are slowing growth.

There's been a psychological adjustment for consumers as well as at the corporate level, said Davis. That's why we aren't seeing currencies such as the yen impacted by these developments.

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