2014-12-16

Fwd: Oil and the dollar

'Commodity prices are inversely correlated to the dollar. The oft-cited rationale is that a stronger currency makes dollar-priced commodities more expensive to buyers using other currencies.

The ICE dollar index DXY, +0.12% a measure of the currency against a basket of six major rivals, is up more than 10.8% since the beginning of the year. Moreover, the index is up more than 10.3% since the beginning of May.

Binky Chadha, chief global strategist at Deutsche Bank, argues that the strong dollar is the primary factor in oil's decline. After all, oil supplies have been building for a long time. It's hard to believe that investors just "suddenly woke up" to the oil glut at midyear, he said.

http://www.marketwatch.com/story/here-are-the-reasons-oil-is-plunging-toward-60-2014-12-10


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