The decision of the OPEC+ countries to reduce the Oil production has caused Oil prices to jump. Within the G10 universe it was mainly the US Dollar that benefitted. Why? Ulrich Leuchtmann, Head of FX and Commodity Research at Commerzbank explains the USD reaction.
“Dollar dominance” is an economic concept not an accounting concept
“If US energy production becomes more valuable because in other places (in the OPEC countries) production is falling, Oil production in the US becomes a more profitable business and attracts capital and labor. In that sense everything else the US produces also becomes ‘more valuable’.”
“The burger in New York is more valuable because it has to be produced despite the fact that those frying it could get more lucrative jobs on the Oil fields…