Dollar at 3 month high vs Euro : crude falls

18-Dec-09

After climbing up by almost two dollars on the previous day, crude oil for January delivery dropped by a dollar to US$71.6 on the Nymex. A report by the Energy Department that US crude inventories declined to the lowest since the week ended Jan. 9, propped prices in the previous sessions. The dollar has peaked to three month highs, strengthening vs the euro. Since a stronger dollar limits the allure of commodities like oil as a currency hedge, crude oil that got less attractive to investors, dropped. The dollar advanced against all 16 of its most-traded counterparts, strengthening to US$1.4341 per Euro. The Euro has seen a decline because of Greece’s latest debt downgrade that fuelled concerns that spiralling national debts may hamper the global economic recovery. A report by the Federal Reserve that the US economy is stabilizing and the deterioration in the labor market is dwindling, has also propped the greenback.