Why Does Oil Impact Currency Rates?

04 September 2008 - Which Way To Pay

    



Why Does Oil Impact Currency Rates?

Nations who are significant oil exporters can see strong correlations between the oil price and the performance of their currencies.  These are the so called "commodity currencies", which include the Canadian and Australian dollars (both of which have risen sharply with oil over the last 24 months).  Conversely, counties who rely in importing oil will see their currencies weaken as oil prices rise.  For the same reason, South Africa is heavily reliant on gold exports, and therefore the Rand can sometimes show a correlation with the gold price. 

There is also a long standing debate over the US dollar's affect on oil prices, and vice versa.  World oil has been priced in dollars since 1971, linking the two together.  When oil rises, the dollar tends to fall.  That makes oil price rises more significant to US buyers, but mitigates the impact of price rises for other nations, who receive more dollars for their currency as the dollar falls.

50x50_EXCHANGE.jpg

Related Links :
Foreign Exchange Merchants

PRODUCT RANGES: CURRENCY EXCHANGE
Foreign Exchange and Currency.
TRADING
Forex, CFDs, Shares and Futures.
INVESTMENTS
ISA, Pensions, Savings Accounts.
LOAN PRODUCTS
View all Loan and Debt Products.
CARD PRODUCTS
All Card Products Compared.
MONEY PRODUCTS
All Money Products Compared.
INSURANCE PRODUCTS
All Insurance Products Compared.

Current bank account complaints increase as the packages offered fail to deliver to customers
07 October 2014 - Which Way To Pay
Many Bank accounts are continuing to apply unwanted fees for 'packages' that aren't being delivered
Read More >>
Separation and what it means for your finances
25 June 2014 - Lauren Middleton
Separating, or filing for divorce or dissolution of your civil partnership is a highly stressful time,with many emotions running high however it is in your best interest to sort out your finances straight away.
Read More >>
Credit card fraud and what you can do to prevent it.
12 May 2014 - Lauren Middleton
If you own a credit card then you are assessable to credit card fraud. Although you may think your being cautious it’s easier than you think to be fooled by sophisticated scams.
Read More >>