Oil falls as Dollar Climbs… WSJ – Commodity Research Group

April 23, 2018 by Jim Colburn Leave a Comment

Causation? Correlation?

Here is the WSJ:

”“We are seeing some renewed dollar strength…which is really the main driver,” said Ole Hansen, head of commodity strategy at Saxo Bank. The geopolitical risk to supply that has buoyed prices in recent days has mostly now been priced in, “allowing some profit-taking to occur,” Mr. Hansen added.

Dollar-denominated commodities like oil tend to have an inverse relationship with the U.S. currency. The Wall Street Journal Dollar Index, which measures the greenback against a basket of 16 of its peers, was up 0.4% Monday morning.”

But the CME’s cross correlation tool, here, shows the thirty day correlation between changes in the dollar and oil prices close to zero: +.05 vs. Euro; .00 vs. Yen…

Has something changed?

Commodity Research Group (CRG), founded by veteran analyst Edward Meir, is an independent research consultancy specializing in base and precious metals, as well energy products. The Group provides research and general price analysis for these markets, along with advice to companies seeking to construct commodity hedging strategies.

Our associates bring decades of experience to the table, as they seek to help our clients understand the markets. CRG will distill the myriad of pricing variables mentioned above into coherent research that is to-the-point and tailored to a clients hedging or pricing needs. In addition, CRG is available for consulting assignments and speaking engagements. CRG does not manage money or trade for itself.

Reader Interactions

Leave a Reply Cancel reply