Thursday, 17 Dec 2009

USD and Oil Price Increase Still Leading Forex News

The big news in the forex market today continues to be the rising US Dollar, and the sudden spike in Crude Oil prices. Given the amount of positive economic reports from each economy, there appears to be a rising level of optimism that the world economy is on a strong path to recovery. Statements from US Federal Reserve Board Chairman Ben Bernanke suggested as much, despite saying that interest rates must remain at their record low levels while the economy heals.

Following a report that US oil inventories dropped further this month, the price of Crude Oil has apparently spiked above $74 a barrel. The falling inventory either highlights a growth in industry, or a short-fall in oil supply; both of which put upward pressure on the price of oil. However, it may be that Oil prices have not yet priced in the strength of the USD and thus could correct back downwards by the end of today or tomorrow.