Retrieved 19 October The Balance. Xinhua Net. March 23, International Monetary Fund. Retrieved January 14, The Economist.

Petrocurrency

April 28, Retrieved February 7, UBC News. The Guardian. Retrieved 4 July The Oil Kings: How the U. New York: Simon and Schuster. ISBN Retrieved 17 November Debt Secret". Bloomberg News. Retrieved 17 July Iran Daily.

What is the correlation coefficient?

January 24, Archived from the original on May 17, Asia Times. March 22, Archived from the original on March 23, As an essential commodity, increasing crude oil prices usually increase inflation pressures across the world, so when oil prices rally this tends to push up inflation over the long run. Silver and other precious metals tend to be highly positively correlated with gold, so there may be a chance to take advantage of other Forex correlations.

On the other hand, falling oil prices tend to exert a downward pressure on inflationary trends, which tends to hinder optimism about U. The gold supply chains themselves are also heavily influenced by whatever happens in the oil markets. Oil is extensively used in gold mining, so increasing oil prices tend to affect the margins of gold mines, affecting the supply of the metal.

How to Profit from the Relationship Between Crude Oil and Forex

Another asset that has a well-known, though tricky, relationship with crude oil is natural gas. Historically, both commodities have moved in tandem as they were often positively correlated, however, this relationship has changed significantly in the last decade. Sharp market movements may be an opportunity to trade currencies and other financial assets that have a positive or even negative crude oil correlation. Conversely, a positive outlook for the stock market may be an opportunity to short crude oil Forex pairs, or to be long on commodities which tend to be positive correlated with the price of crude oil.

Ibeth contributes daily market commentary in both English and Spanish both of which she speaks fluently and she also manages the DailyForex mobile app to ensure that traders around the world are getting important market updates in real time.

Understanding the Correlation of Oil and Currency

We commit to never sharing or selling your personal information. Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed. Crude Oil and Other Assets. Crude Oil Price Movements and Exchange Rates We already mentioned that there are countries that are heavily dependent on their oil exports.

Crude Oil Price Movements and Fundamental Analysis Just as crude oil prices can influence currency exchange rates, they can also impact the fundamentals that play a role in the valuation of some currencies. Crude Oil and Other Assets Just as it is possible to trade Forex currency pairs based on crude oil price movements, traders can also take advantage of the relationship between oil market movements and other assets, particularly other commodities.

Sergey Golubev , You agree to website policy and terms of use. Correlation between crude oil prices and currencies.

New comment. Justin Iheakanwa Crude oil shows a tight correlation with many currency pairs for three reasons. First, the contract is quoted in U.