Oil and USD

[trade2rich]

The impact of rising oil prices on the USD can be positive and negative. High oil prices will hurt the economy and bad for the dollars. But can be good also because oil is priced in USD. Hence, rising oil prices may lead the USD to appreciate. Am I rite?

 

[Gumping]

The impact of rising oil prices on the USD can be positive and negative. High oil prices will hurt the economy and bad for the dollars. But can be good also because oil is priced in USD. Hence, rising oil prices may lead the USD to appreciate. Am I rite?

Rite:
noun [C usually plural]
(a usually religious ceremony with) a set of fixed words and actions.

Erm .... nope!

Whether you are right or not though.....

I've never seriously looked at the correlation, but I would never say that one is a 100% decent reliable indicator for the other.
For example, USD depreciation should probably herald a rise in oil price to compensate for it. But then again currency depreciation usually suggests a weak economy, hence lower demand for energy, hence lower oil prices. But if oil is going up, other countries could be expected to buy dollars in order to keep their stocks of USD high in order to buy oil at inflated prices. Confused?

I AM!!

Maybe someone more knowledgable would be better placed to answer the question.

 

[Magos]

let me make it simple

Oil up, dollar down ----> Bear Srearns is closed
OIl down, dollar up -----> UBS / Credit suisse problems