The inverse relationship between oil futures price and US dollar has always been a fact. Recently, we have observed weakened dollar at $1.60 per euro. The respective rise of the oil futures was due, namely to this dollar effect.
The rising dollar is a factor that should positively influence the American investors and could foster their expansion towards the developing markets. Taking into account the higher risks at those markets, the effect won’t definitely be felt soon. Furthermore, the weakening macro expectations related to the mortgage crisis would delay the expansion of the large institutional investors as well. It is not the oil price that should be the investors’ incentive only. This factor is strongly volatile and the magnitude of the positive as well as the negative swings is severe.
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