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The US Dollar is positively correlated with the price of things the US exports. And negatively correlated with oil prices because the US is still a net importer
by WildUtah 11y ago
The US Dollar is positively correlated with the price of things the US exports. And negatively correlated with oil prices because the US is still a net importer, though importing only about a third as much as it did a decade ago.
So you will see the dollar go up when world markets are robust for American products like software, jumbo jets, cereals, Wall Street scams, and Hollywood.
- adventured 11y agoThat's highly context dependent. The US Dollar soared starting in Summer 2014 due to the end of QE. It had absolutely nothing to do with US exports. The USD returned to where it otherwise would have been without the Fed debasing it so heavily. If the Fed raises interest rates, it'll go up further - again, while having absolutely nothing to do with US exports in that case. The USD and oil trade inversely because oil is priced in dollars globally. If the value of the dollar rises, oil inherently must drop in price. It has nothing to do with the amount of oil the US imports or not. What matters is the currency that oil mostly trades in globally, and that is US dollars. The dollar doesn't go down because oil goes up, that confuses the relationship entirely. It's oil that trades in dollars, not dollars that trade in oil.