Tumbling US dollar sends oil, gold skyward
- Source: Global Times
- [01:46 October 15 2009]
- Comments
Morrison said the US government backed a weak dollar because it reduces the value of the country's debt and makes US exporters more competitive.
The dollar's sharp fall meanwhile sent the price of New York-traded crude oil above $75 and to the highest level for almost 12 months.
New York's main contract, light sweet crude for delivery in November, soared to $75.15 a barrel, last seen on October 20, 2008, while Brent North Sea crude for November delivery advanced 69 cents to $73.09 a barrel in London Wednesday.
A struggling greenback boosts demand for dollar-denominated commodities such as oil and gold when they become cheaper for buyers holding stronger currencies.
Expectations that the dollar will continue to languish against the euro and other major currencies will continue to boost the crude market, analysts said.
On the London Bullion Market, the price of gold jumped to a record high at $1,070 an ounce.
"Investment flows continue to buoy commodity prices," said James Moore, analyst at specialist website thebullion desk.com.
"We expect a further fall of the US currency over the next two weeks," said Dariusz Kowalczyk, chief investment strategist with the SJS Markets financial services firm.
The tumbling dollar also partially boosted the stock market Wednesday, with London's FTSE 100 benchmark index at 5,258.23 points – the highest level since late September, 2008.
AFP/Global Times
