Bogota Free Planet Comments
Strong Dollar Could Cap Oil Prices
Posted by BFP Staff on Jul 27, 2018 at 11:58 AM
The problem for many emerging markets is that oil prices have been going up at the same time.
By Irina Slav for Oilprice.com
The strength of the U.S. dollar poses an obstacle to further gains in oil prices.
President Trump’s trade war with China, which is still in its early stages, has already battered the yuan. The dollar has gained more than 8 percent against the Chinese currency since March. As Reuters points out, in dollar terms the price of Brent oil has climbed 9 percent this year, but in yuan terms oil is now nearly 14 percent more expensive.
But it isn’t just the yuan that has been knocked down a peg or two by the greenback. The U.S. dollar index is at its strongest in a year, pushed along by steady rate tightening from the U.S. Federal Reserve and solid GDP growth.
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