If you are not paying attention to the currency market and only a couple of days after the oil stocks fell, you may think that the dollar will rise against other currencies. The bearish oil bulls, however, will say that the price of oil dropped because of the fall in the value of the dollar.
For example, if you took a look at the charts of the International Stock Market, and how the markets reacted to the weakening dollar during the last two years. You would have observed that the dollar has strengthened significantly against almost all other major currencies. There is an obvious reason for this.
If you check the currency traders, you will see that the oil prices dropped just a couple of days ago when the prices of oil went up again. According to some trader sources, the oil stock drops may be a sign of an imminent trend reversal, which the paper markets are expecting. This means that the dollar is weakening as a result of the oil stocks.
According to other analyst sources, the oil, especially of the higher quality types like the Canadian crude oil (C-style), is also a good means to control the commodity prices in the near future. If you consider the fact that the US dollar is almost constant at 78.00 per USD, you will understand that the oil price will be able to adjust according to the buying demand in the US market. Theoretically, the oil stocks and the dollar will increase or decrease, depending on what happens with the US stock market.
If you consider the fact that we just had a sharp increase in the price of oil, you can easily understand why it is not surprising that it was hit hard, according to traders. If you add that to the fact that the stock market in the US recently crashed down, you can understand why you should consider the buck too, if you want to protect your wealth and assets.
We must remember that US President Obama is on the job. We will soon witness a lot of crises and negative things about the economy. Therefore, we can safely say that the US dollar will go down or the dollar will strengthen.
However, we are going to be discussing this further on because the main factor is the dollar and the Wall Street traders. They always believe that the dollar will go up in the future, especially when things are bad.
In fact, many online traders even take the word of these traders when they predict about the depreciation of the dollar. If you look at the online forex brokers, you will see that the currency traders were still watching the news and noticed the strength of the dollar and the weakness of the Australian dollar.
In addition, many investors are concerned about the upcoming economic crisis in the entire nation. To be able to safeguard their money and assets, it would be wise to purchase their stocks in the longer term rather than just when the stock market is falling, as the market is not going to drop.
For example, when the market is going to plummet on December 24th, this is just too early to buy stocks, since the prices are falling due to the fall in the dollar. The stock prices will start to drop even more in January and the international stock market will plummet during February, which is just too early to buy stocks.
If you are unable to guard your money in the longer term, if you will wait until the January, you will be able to buy stocks in February when the market will be lower than before. During the first three months of the new year, the market will again be stable and it will rise during the fourth quarter of the year and even until the New Year, if there is no global financial crisis.
You will have to realize that you need to get back to the paper markets and that is only possible if the dollar keeps rising. Furthermore, it is never wise to invest your money in stock in the last week before the holidays as the market will collapse and you will lose a lot of money.