Oil Markets Impact On Forex

By James McKee

Continued conflict in the Middle East has resulted in price hikes on oil throughout and now the rest of the world must either pay or go without. Such a precarious position is one that Western countries will begin to feel the squeeze from financially very shortly. The USD and other western currency will suffer greatly if the cost of oil goes up because so to will the cost of all other goods. A rise in the price of goods corresponding with an ailing US dollar will result in a very decreased purchasing ability for US citizens as well as those in Europe and Asia.

Oil is used in everything from gasoline to toothpaste, petroleum products are used in every aspect of our daily lives and as a result we are implicitly dependent on them. This type of dependence results in a high premium being placed on oil and the ability to purchase it as affordably as possible. Already the world’s stock markets have fallen one percent overall as risk appetite is falling through the floor with most investors fearing further conflict in oil producing countries. This is driving the value of currencies such as the EUR through the floor since they have both domestic and international problems knocking on their door.

The conflicts currently occurring show little sign of slowing down until those involved are satisfied they have achieved their goals. Seeing that the problems in Middle East are rooted in inadequate food supplies and other infrastructural shortcomings this problem may continue for some time. Those on the forex currency exchange should keep an eye on the value of oil which is currently up to $94.00 a barrel, those who invested in oil futures are doing significantly well while the rest of us are waiting for the next tidal wave.

About the Author

Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the forex exchange rates regularly.

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