Why US Dollars rised over teh last day?

[Vanguard]

Originally posted by Kidicious


No, it's because when the price of oil goes up people demand less dollars for the purpose of storing value. They choose other currencies instead. When the price of oil drops there is danger of bubbles in the other currencies so people go back to dollars.

This could be another bubble.

Well, the effect works in a number of ways. I chose my explanation for clarity. Perhaps the simplest way to explain it is:

Rising oil prices hurt the US economy. So the dollar goes down.

Falling oil prices help the US economy. So the dollar goes up.


Of course, it should be said that the negative correlation is not absolute. Financial actors with a lot of power could change the equation, for a while at least.

[Asher]

Originally posted by Nikolai
The funny thing is, we didn't need the bailout. Our government is going to lose next year's election as it stands now and they thought throwing money on anyone and everyone will give them said election. You should have seen the budget for next year which they submitted some days ago.

Something tells me you don't have any idea when it is or is not needed.

[Nikolai]

Fun fact: A radio station interviewed some people on the street a few days ago on how the crisis affected them. Everyone but one said they did not feel it much. The last one said he had cut down on the amount of caffe latte.

And anyhow, I know it doesn't affect me as of yet.

[Asher]

Originally posted by Nikolai
Fun fact: A radio station interviewed some people on the street a few days ago on how the crisis affected them. Everyone but one said they did not feel it much. The last one said he had cut down on the amount of caffe latte.

And anyhow, I know it doesn't affect me as of yet.

Fun fact: This clearly demonstrates you have no idea what the problem is.

[Nikolai]

I know that it doesn't affect us regular people just yet.

[Asher]

I'm just demonstrating you don't understand. Don't mind me.

[Nikolai]

Funny then that the chief economist in Norway's largest bank said the other day that the crisis has to become much worse than it is now before it affects regular people here in Norway.

[Kidlicious]

Originally posted by Nikolai
Funny then that the chief economist in Norway's largest bank said the other day that the crisis has to become much worse than it is now before it affects regular people here in Norway.

Maybe the crisis became much worse just today.

Norwegian firm hit by US financial crisis
Kongsvinger-based TI Automotive is reducing production due to dwindling car sales in the US as aresult of the financial crisis. 24 of the 253 workers will lose their jobs.

http://www.norwaypost.no/cgi-bin/nor...aker?id=197913

[DanS]

Holy ****! The Dollar is up 4% today against the Pound. It's up almost 3% against the Euro.

[KrazyHorse]

Originally posted by Vanguard



Because oil is still mostly priced in dollars. So when the price of oil goes up, the world creates a large batch of dollars and sends them to oil producing countries. The oil sheikdoms use their dollars to buy euros and yen (because they don't need all those dollars and they want a new Maybach). This causes Euros to go up in price and the dollar to go down.

Vice-versa when oil falls.

This has nothing to do with what currency oil is priced in. Duh.

It is very straightforward:

1) The US imports oil. Lots of it.
2) When oil goes up the US sends more dollars out to buy it. Doesn't matter whether oil was priced in yen, euros or anything else. If it was priced in yen then the US would first buy yen with dollars, then buy oil with yen. At the end of the day the effect is the same. There are more USD outside the US
3) When there are more USD outside the US their value goes down relative to other currencies. You have increased the supply without increasing the demand.

This is the same reason that the CAD is positively correlated with oil prices. Yet I don't see too many international oil markets priced in CAD.



Currency fethishism is incontrovertible proof that its practitioner doesn't have a ****ing clue.

[KrazyHorse]

Originally posted by Kidicious


No, it's because when the price of oil goes up people demand less dollars for the purpose of storing value. They choose other currencies instead. When the price of oil drops there is danger of bubbles in the other currencies so people go back to dollars.

This could be another bubble.

More tardedness.

[KrazyHorse]

Originally posted by DanS


I have heard that European banks are/were more leveraged than their US counterparts.

I don't know the details, so can't confirm or dismiss.

This is true from what I've seen as well. Mid 40s as opposed to low 30s.

Canadian banks average at 18, IIRC.

The downward pressure on the CAD is coming almost entirely from expected commodity price drops, I would hazard.

[Naked Gents Rut]

Are there any jobs in the defense industry in the Great White North? Someone wants me to explore my options in Canada and I'm starting to look more kindly on the idea now that Democrats are going to get the chance to bring all their wet dreams to life here in the States.

[KrazyHorse]

Defence industry? Do we have one?

[Naked Gents Rut]

Bombardier is the only thing she mentioned since it's in Montreal. I don't have the first clue what they actually do.

edit: So much for that...

Bombardier was, until recently, a major Canadian defense contractor. With the latest restructuring, the company sold off nearly all of its military related work in Canada.

http://en.wikipedia.org/wiki/Bombardier