The possible rate increases will affect Crude Oil?

ICEUSA:DX1!   U.S. Dollar Index
Crude oil             and the US dollar index             in the last six trading sessions
Between June 7 and June 14, 2016, crude oil             ( USO ) fell by ~3.7% while the US Dollar Index             ( UUP             ) rose by around 1.2%. The US Dollar Index             initially fell after weak US non-farm payroll data were released on June 3, 2016. This could delay the timing of the next interest rate hike.

However, after making a low of $93.59 on June 8, the dollar index             started to recover. On June 8, crude oil             touched its 2016 high of $51.23.

The correlation between crude oil             and the dollar index             in the last six trading sessions was approximately -80.6%. This shows the degree of the inverse relationship between the two assets. Apart from mainstream news, recent movements in crude oil             have also been fueled by the fall in the dollar index             .

Correlation of crude oil             and the US Dollar Index             since 2007
Between September 2007 and April 2013, crude oil             ( USO ) and the US Dollar             Index’s ( UUP             ) one-month correlations were positive in only a few instances. Their correlation coefficients were largely negative for these five and a half years.

What’s the correlation between crude oil             and the US dollar             index?
Crude oil’s negative correlation with the US dollar index             between September 2007 and April 2013 clearly implies that crude oil             had an inverse relationship with the US Dollar Index             .

However, from April 2013 to date, crude oil             and the dollar index’s one-month correlations have been more bidirectional. In the last three years, these one-month correlations have fluctuated between -64% and 43%. This fluctuation could indicate that fundamental drivers such as Saudi Arabia’s decision not to cut production, US shale oil             producers’ cost and production dynamics, US inventory data, and other fundamental news sometimes had greater impacts on crude oil             than on the dollar.
评论: Transformed from a bearish to sideways view on the dollar to a bullish scenario
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